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Page 1: EUROPEAN RES-E POLICY ANALYSIS - EWI · 2016-01-13 · EUROPEAN RES-E POLICY ANALYSIS A model based analysis of RES-E deployment and its impact on the conventional power market Final

EUROPEAN RES-E

POLICY ANALYSIS

A model based analysis of RES-E deployment and its impact on the conventional power market

Final Report, April 2010

www.ewi.uni-koeln.de

Alte WagenfabrikVogelsanger Straße 32150827 Köln

Tel.: +49 (0)221 277 29-100Fax: +49 (0)221 277 29-400

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Institute of Energy Economics

at the University of Cologne

European RES-E Policy Analysis

A model-based analysis of RES-E deployment and its impact on the conventional power market

Final Report

April 2010

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Institute of Energy Economics at the University of Cologne (EWI)

Vogelsanger Straße 321

D-50827 Köln

Tel: 0049-(0)221-27729-100

http://www.ewi.uni-koeln.de

Michaela Fürsch

Christiane Golling

Marco Nicolosi

Ralf Wissen

PD Dr Dietmar Lindenberger

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Table of Contents List of Figures .............................................................................5

List of Tables ..............................................................................7

Abbreviations ..............................................................................8 1 Introduction ........................................................................ 18 PART I: RES-E Promotion Systems ........................................ 19

2 Motivation and Status Quo of RES-E Promotion ............... 19

3 RES-E promotion policies .................................................. 28 3.1 Evaluation criteria for RES-E promotion schemes ....................................... 28

3.1.1 Effectiveness................................................................................................... 28 3.1.2 Efficiency ......................................................................................................... 29

3.2 Classification of RES-E promotion schemes ................................................ 29 3.2.1 Quantity-based versus Price-based instruments ...................................... 30

3.2.1.1 Quantity-based instruments ................................................................ 30 3.2.1.2 Price-based instruments ...................................................................... 32

3.2.2 Technology-specific versus Technology-neutral instruments ................. 34 3.2.3 National versus harmonized support systems .......................................... 35

PART II: Scenarios, Methodology and Input Parameters ........ 36

4 Scenario definitions ............................................................ 36 4.1 Main scenarios ............................................................................................. 36

4.1.1 Harmonized Quota System (HQS) .............................................................. 36 4.1.2 Business-as-usual (BAU) .............................................................................. 37 4.1.3 Cluster .............................................................................................................. 41

4.2 Auxiliary scenarios ....................................................................................... 41 4.2.1 National Quota System ................................................................................. 41 4.2.2 Harmonized Quota System with RES-E-targets as resulting in BAU-scenario .......................................................................................................................... 41

5 Methodology....................................................................... 42 5.1 LORELEI ...................................................................................................... 43 5.2 DIME ............................................................................................................ 45

6 Input Parameters ............................................................... 47 6.1 Conventional Input Parameters.................................................................... 47

6.1.1 Fuel and CO2 Prices ...................................................................................... 47 6.1.1.1 Nuclear ................................................................................................... 47 6.1.1.2 Lignite ..................................................................................................... 47 6.1.1.3 Coal ......................................................................................................... 48 6.1.1.4 Gas.......................................................................................................... 48 6.1.1.5 Oil ............................................................................................................ 48 6.1.1.6 CO2 Prices ............................................................................................. 49

6.1.2 Power Plant Investment Costs ..................................................................... 49 6.1.3 Electricity Demand ......................................................................................... 50 6.1.4 Nuclear Policy ................................................................................................. 51

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6.1.5 Cross border transmission capacities ......................................................... 53 6.2 Renewable Energy Input Parameters .......................................................... 55

6.2.1 Status Quo of RES-E Capacities ................................................................. 55 6.2.2 Technology specific analysis of potential and costs of RES-E ............... 56

6.2.2.1 Wind Onshore ....................................................................................... 59 6.2.2.2 Wind Offshore ....................................................................................... 62 6.2.2.3 Biomass.................................................................................................. 64 6.2.2.4 Biomass Cofiring ................................................................................... 67 6.2.2.5 Photovoltaics ......................................................................................... 67 6.2.2.6 Geothermal Energy .............................................................................. 72 6.2.2.7 Concentrating Solar Power ................................................................. 74 6.2.2.8 Small Hydro Power ............................................................................... 76 6.2.2.9 Wave Power .......................................................................................... 78 6.2.2.10 Tidal Power ............................................................................................ 79

6.2.3 Overview of resulting RES-E potentials and RES-E generation costs .. 80 6.3 RES-E Targets ............................................................................................. 84 PART III: Results and Discussion ........................................... 86

7 The Harmonized Quota System (HQS) Scenario .............. 86 7.1 Developments in the RES-E submarket ....................................................... 87 7.2 Effects on the conventional Power Market in Case of Target Fulfillment ..... 98

Flexibility Requirements of the Power System ....................................................... 104

8 Comparison of the “Business-as-Usual (BAU)” and the “Harmonized Quota System (HQS)” Scenario ...................... 107 Developments in the RES-E submarket ................................................................. 111 Analysis of potential efficiency gains ...................................................................... 115

9 Discussion of the Cluster Scenario .................................. 117

10 Conclusion – Lessons Learned and Implications for Future Developments........................................................................ 120 ATTACHMENTS.................................................................... 126

A. Generation Figures .......................................................... 126

B. Case Studies .................................................................... 174 B.1 Case Study United Kingdom ...................................................................... 174 B.2 Case Study Sweden .................................................................................. 181 B.3 Case Study Germany ................................................................................. 189 B.4 Case Study Spain ...................................................................................... 194

C. Model Description of DIME .............................................. 201 C.1 Basic properties ......................................................................................... 201 C.2 Structure of the model ................................................................................ 202

C.2.1 Input data ...................................................................................................... 203 C.2.1.1 Supply side data ................................................................................. 203 C.2.1.2 Demand side data .............................................................................. 205 C.2.1.3 Restrictions on electricity exchange ................................................ 208

C.2.2 Output ............................................................................................................ 208

Literature ............................................................................... 210

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List of Figures Figure 2-1: RES-E generation and shares in the EU-27, 1990-2007 ....................................... 21 Figure 2-2: RES-E share in 2007 of EU27++ and corresponding 2010 targets ....................... 23 Figure 2-3: RES-E Support Schemes in the EU ....................................................................... 24 Figure 2-4: Wind Power Qualities and Deployment in the EU27++ (2007) ........................... 25 Figure 2-5: PV Power Qualities and Deployment in the EU27++ (2007) ............................... 26 Figure 4-1: Modelling of country specific promotion policies in BAU scenario .................... 39 Figure 5-1: Interdependence between LORELEI and DIME ................................................... 43 Figure 5-2: LORELEI Model ................................................................................................... 44 Figure 5-3: DIME Model ......................................................................................................... 45 Figure 6-1: EU Nuclear Policy ................................................................................................. 52 Figure 6-2: Installed RES-E capacities in EU27++ countries in 2007 ..................................... 55 Figure 6-3: Development of current renewable capacities in EU27++ countries .................... 56 Figure 6-4: Different concept of RES-E potential ................................................................... 57 Figure 6-5: Subregions for Wind Onshore in Europe .............................................................. 59 Figure 6-6: Electricity generation costs of wind onshore in 2007 ........................................... 61 Figure 6-7: Electricity generation costs of wind offshore in 2007 ........................................... 64 Figure 6-8: Electricity generation costs of stand-alone biomass in 2007 ................................ 66 Figure 6-9: Electricity generation costs of photovoltaics in 2007 ........................................... 70 Figure 6-10: Electricity generation costs of small hydro power in 2007 ................................. 77 Figure 6-11: Realisable RES-E potential in EU27++ countries ............................................... 81 Figure 6-12: Electricity generation costs by RES in EU27++ countries in 2015 .................... 82 Figure 6-13: Electricity generation costs by RES in EU27++ countries in 2020 .................... 83 Figure 6-14: Electricity generation costs by RES in EU27++ countries in 2030 .................... 84 Figure 6-15: RES-E Targets ..................................................................................................... 85 Figure 7-1: RES-E Generation EU27++ in Harmonized Quota System .................................. 87 Figure 7-2: RES-E capacities in HQS ...................................................................................... 88 Figure 7-3: Cumulative RES-E Investment Costs 2008-2020 in HQS (EU27++) ................... 89 Figure 7-4: Development of Marginal Generation Costs in the Conventional Power Market -

HQS scenario .................................................................................................................... 90 Figure 7-5: Regional RES-E generation mix in HQS (2020) ................................................... 91 Figure 7-6: Wind Generation by Country in 2007, 2020 and 2030 ......................................... 92 Figure 7-7: Calculation of Harmonization Gains ..................................................................... 95 Figure 7-8: TGC Trade Streams (2020); GDP weighted target-setting ................................... 97 Figure 7-9: TGC Trade Streams (2020); GDP per capita weighted target-setting ................... 97 Figure 7-10: Generation EU27++ in Harmonized Quota System ............................................ 98 Figure 7-11: RES-E induced shift in the conventional power market ................................... 101 Figure 7-12: Shift of load hours in EU27++ (HQS scenario) ................................................ 102 Figure 7-13: Total installed capacity in EU27++ ................................................................... 103 Figure 7-14: Windreduction as an example in UK under the HQS ....................................... 105 Figure 7-15: Example for the usage of NTC as flexibility ..................................................... 106 Figure 8-1: Design Differences of the RES-E support systems in BAU and HQS ................ 108 Figure 8-2: Deployment path of RES-E generation in BAU and HQS (EU27++) ................ 109 Figure 8-3: RES-E shares vs. RES-E targets 2020 in BAU scenario ..................................... 110 Figure 8-4: Introduction of competition between regions and competition between

technologies (switch from BAU to HQS) ...................................................................... 111 Figure 8-5: RES-E Generation EU27++ in BAU Scenario .................................................... 112 Figure 8-6: RES-E capacities in BAU scenario (EU27++) .................................................... 113

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Figure 8-7: Cumulative Investment Costs 2008 – 2020 in BAU scenario (EU27++) ........... 114 Figure 8-8: RES-E generation mix in BAU (2020) ................................................................ 115 Figure 9-1: Differences in the RES-E generation 2020 between Cluster, BAU and HQS .... 118 Figure 9-2: Certificate Prices in 2020 in HQS, Cluster and BAU ......................................... 119 Figure B-1: Electricity generation from RES and quota fulfillment in the British System ... 179 Figure B-2: Remuneration and Quota fulfillment in the British System ............................... 180 Figure B-3: Number of TGCs issued and cancelled, together with accumulated surplus over

the period 2003-2007. .................................................................................................... 184 Figure B-4: Average price of spot traded electricity certificates. .......................................... 185 Figure B-5: Electricity generation from RES within the Swedish quota system [GWh] ....... 186 Figure B-6: Total net support of RES-E by energy source in the Swedish quota system [mio.

€] ..................................................................................................................................... 187 Figure B-7: RES-E generation structure and fraction of the total support by energy source in

the Swedish quota system .............................................................................................. 188 Figure B-8: Development of RES-E generation in Germany ................................................ 192 Figure B-9: Development of total RES-E net support in Germany ....................................... 193 Figure B-10: Development of remuneration level and premium level in Spain .................... 196 Figure B-11: Electricity generation from RES and share of gross electricity consumption in

Spain ............................................................................................................................... 199 Figure C-1: Input-output structure of DIME .......................................................................... 202 Figure C-2: Representation of European countries in DIME ................................................. 204 Figure C-3: Example of hourly, daily, and seasonal load fluctuations .................................. 207 Figure C-4: Example of deriving residual demand ................................................................ 208 Figure C-5: Sample of hourly dispatch in Germany for a working day in autumn ................ 209

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List of Tables Table 2-1: RES-E share 1997, 2006; RES-E targets in 2010 ........................................ 20 Table 2-2: RES-Targets in 2020 ......................................................................................... 22 Table 6-1: Fuel and CO2 – Price Assumptions ................................................................. 49 Table 6-2: Conventional Power Plant inputs ..................................................................... 50 Table 6-3: Gross Electricity Consumption of all EU Member States (TWh)................. 51 Table 6-4: Overview of Import and Export NTC in MW (Summer) ................................ 54 Table 6-5: Subtechnologies of wind onshore .................................................................... 60 Table 6-6: Investment and O&M costs for wind onshore in Germany in 2007 ............ 61 Table 6-7: Subtechnologies of wind offshore .................................................................... 62 Table 6-8: Investment and O&M costs for wind offshore in Germany .......................... 63 Table 6-9: Subtechnologies of biomass ............................................................................. 65 Table 6-10: Biomass investment and O&M costs in Germany in 2007 ........................ 66 Table 6-11: Biomass full load hours ................................................................................... 67 Table 6-12: Subtechnologies of photovoltaics .................................................................. 68 Table 6-13: Investment and O&M costs of photovoltaics in Germany .......................... 69 Table 6-14: Subtechnologies of geothermal energy ........................................................ 73 Table 6-15: Investment and O&M costs of geothermal power production in Germany

.......................................................................................................................................... 74 Table 6-16: CSP investment and O&M costs in Spain in 2007 ...................................... 75 Table 6-17: Investment and O&M costs of small hydro power....................................... 77 Table 6-18: Investment and O&M costs of wave energy ................................................ 78 Table 6-19: Investment and O&M costs of tidal energy .................................................. 80 Table 7-1: RES-E targets 2020 weighted by GDP and GDP/capita factor .................. 94 Table B-1: Quotas for the period 2003-2030, forecast new renewable electricity

production capacity and actual renewable electricity production ......................... 182 Table B-2: Tariffs and premiums in the Spanish RES-E promotion system [as

modified in RD 661/2007] ........................................................................................... 200 Table C-1: Technologies treated endogenously and exogenously ............................. 203 Table C-2: Properties of technologies .......................................................................... 205 Table C-3: Total occurrence of day types per season ............................................... 206

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Abbreviations a.g.l. Above ground level BAU Business-as-usual Bill. Billion (German: Milliarde) BMU Bundesumweltsministerium (department for environment, Germany) BoS Balance of System CO2 Carbon dioxide CHP Combined Heat and Power CSP Concentrating Solar Power DIME Dispatch and Investment Model for Europe DNI Direct Normal Irradiation DSM Demand Side Management EC European Commission EEG Erneuerbare Energien Gesetz (Renewables Energy Law in Germany) EU European Union EU27 All 27 EU Member States EU27 ++ All 27 EU Member States plus Norway and Switzerland FIT Feed-in Tariff GDP Gross domestic product GO Guarantees of Origin GW Gigawatt GWh Gigawatt hour HDR Hot Dry Rock HQS Harmonized Quota System IDEA Instituto para la Diversificación y Ahorro de la Energía kW Kilowatt kWp Kilowatt peak LORELEI Linear Optimization Model for Renewable Electricity Integration in Europe Mill. Million MS Member State MW Megawatt MWh Megawatt hour NFFO Non Fossil Fuels Obligation (UK) NI-NFFO Northern Ireland Non Fossil Fuels Obligation NPV Net Present Value NQS National Quota System NTC Net Transfer Capacity OFGEM Office of Gas and Electricity Markets (UK) O&M Operation and Maintenance PFER Plan for the Promotion of Renewable Energies (Spain) PV Photovoltaics RD Royal Degree (Spain) RES Renewable Energy Sources RES-E Electricity from Renewable Energy Sources RES-H&C Heating and Cooling from Renewable Energy Sources RES-T Transport from Renewable Energy Sources RO Renewable Obligation Order (UK) ROC Renewable Obligation Certificate (UK)

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RPR Registro de Preasignación de Retribución (Register on the in-advance-allocation of the compensation)

SEK Swedish krona SRO Scottish Renewables Obligation TGC Tradable Green Certificates TSO Transmission System Operator TWh Terawatt hour UK United Kingdom

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Executive Summary

Motivation and Methodology The 2009 EU Directive on the promotion of renewable energy sources (RES)

establishes national targets for RES shares of total energy consumption. The overall

European target is 20% RES in 2020, covering heating and cooling, transportation,

and electricity generation. Against the background of these ambitious policy targets,

the present study investigates possible developments of renewable energies in the

European electricity sector (RES-E).

This study analyses regional RES-E deployment induced by different support

schemes and the interaction between the renewable and the conventional power

markets under growing RES-E shares until 2020, with a further outlook until 2030.

Since Norway and Switzerland are part of the European power market, these

countries are also included in this study (EU27++). In a first step, the renewable

resource potentials and deployment costs of the following RES-E technologies have

been assessed: wind onshore and offshore, biomass, photovoltaics, geothermal

power, concentrating solar power, small hydro power, tidal and wave power. In order

to analyze their deployment in more detail, subtechnologies and subregions have

been included, resulting in a total of 2,222 modelled deployment options per year. In

order to create a Business-as-usual scenario (BAU), all European RES-E support

schemes have been implemented in a newly developed optimization model for

renewable energy deployment (LORELEI1). The LORELEI model was linked to the

competitive power market model DIME2 in order to analyze interdependent effects in

both markets.

The different possible attributes of RES-E support are price-based versus quantity-

based, technology-specific versus technology-neutral, and national versus EU-wide

harmonized support. Three scenarios of support schemes are analyzed in detail to

take into account a certain bandwidth of design options. The first scenario models a

harmonized quota system (HQS). Here, all national targets are aggregated to form a

single European technology-neutral quota for RES-E generation. The RES-E

1 “Linear Optimization Model for Renewable Electricity Integration in Europe” 2 “Dispatch and Investment Model for Europe”

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deployment develops according to a cost-minimizing calculus, modelling EU-wide

competition between technologies and plant locations. The BAU scenario models all

European support schemes according to their actual designs. Feed-in tariff systems

(FIT), premium systems, and quota systems have been implemented with their

current designs and pricing definitions (e.g. tariff reductions over time have been

implemented as defined in the national laws). Since the BAU scenario is dominated

by national FIT systems, the deployment is mainly price-based and technology-

specific. The “Cluster scenario” takes into account the possibility for Member States

(MS) to design shared RES-E support schemes, which is given by the EU directive.

Since a shared quota system is easier politically implementable than a shared FIT

system, we defined the cluster by aggregating the quotas of those MS, which have

national quota systems in the BAU scenario.

Conclusion – Lessons Learned and Implications for Future Developments According to the assessment of regional RES-E potentials, the EU-wide RES-E

target is feasible – however posing significant challenges for the development of the

conventional power system.

Since the HQS is the only scenario which reaches the European RES-E targets due

to the quantity-based setting, and since it does so at minimal RES-E generation cost,

this normative scenario is at the center of our discussion. We summarize the main

findings of HQS and compare it with the scenarios BAU and Cluster. This order

emphasizes that this study includes comparative scenario analyses and no forecast.

Scenarios are extrapolations under given sets of assumptions. They do not reflect

most likely developments. Especially, our BAU scenario freezes current national

RES-E promotion laws. It does not include likely, but in detail unforeseeable

adaptations of these laws.

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RES-E support in HQS Scenario

1. RES-E Generation Mix In HQS RES-E are promoted in a Europe-wide and technology-neutral manner.

Optimization of RES-E deployment takes into account regional RES-E generation

costs and national power prices.

In HQS, intermitting wind power deployment plays a dominant role. Especially the

currently still uncertain deployment of offshore wind increases significantly in HQS.

Still expensive technologies like photovoltaics or geothermal power are hardly

deployed under technology-neutral support.

2. RES-E costs The investment costs in the HQS scenario are bill. 313 €2007 accumulated net-

present value between 2008 and 2020. The dominant technologies are wind onshore

with 42%, wind offshore with 21% and biomass with 24%. The remaining 13 % are

spent for less mature technologies, with a 6% share of concentrating solar as the

largest share of the minor technologies.

3. Regional Distribution and TGC Trade Streams Since the harmonized quota scenario calculates one single Europe-wide RES-E

quota, the individual national targets are reached through an ex-post TGC trade. It is

important to note that national RES-E targets have not been defined by all MS yet.

Therefore in this study these targets needed to be assumed.

Some MS with low or expensive resource potentials gain from buying certificates to

reach their targets, while MS with larger potentials and relatively low targets gain

from deploying additional RES-E above their targets and selling TGCs on the market.

Mainly countries with a high wind power potential deploy RES-E above their national

target. Within the target setting, the wealth of the individual MS has been taken into

account. Eastern European countries received lower targets according to their GDP.

Therefore, it can be seen that altogether the 12 Eastern European countries are net-

exporters of TGCs due to their comparatively low RES-E targets. However, since

some Eastern European MS have still considerable demand growth rates, the target

fulfillment can also require these countries to become net importers. Altogether, the

15 Western European MS import TGC with a value of 3.9 bill €2007 in 2020 when a

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GDP weighted target setting is assumed, and 4.6 bill €2007 when a GDP per capita

target-setting is assumed.

4. Harmonization Gains In this study harmonization gains are defined as cost savings in RES-E generation

(investment, O&M, fuel costs and heat remuneration), solely through a switch from

national to harmonized support. In order to calculate these savings, the harmonized

quota scenario is compared with an auxiliary scenario which differs only in this

respect. Therefore, the auxiliary scenario simulates national technology-neutral quota

systems. The potential RES-E cost reduction between these two technology-neutral

scenarios is bill. 118 €2007 accumulated net present value 2008-2020. It is important

to note that this harmonization gain in RES-E generation may be counteracted by

additional costs of e.g. grid enhancements due to higher concentration of intermitting

RES-E in certain regions resulting from harmonized support. Grid costs and

additional costs in the conventional power systems are not considered in this study,

but would need to be assessed to find an overall efficient solution.

Conventional Power Market in HQS Scenario

5. Total Generation Mix The RES-E share in the EU27 rises to a significant degree of roughly 34 % in 2020

and 45 % in 2030, due to the quantity-based target setting.

Power generation from lignite remains approximately constant, due to relatively low

costs of providing lignite from indigenous mines. Nuclear power generation remains

an important energy source in the European generation mix. The share of hard coal

shrinks in the generation mix, also due to the relevance of the CO2 price and the

lower demand for conventional generation. Due to its lower CO2 intensity, higher

flexibility, and relatively low investment costs natural gas will play a relatively larger

role in the power generation mix.

6. Capacity Effects and Shift in Power Plant Utilization Since RES-E cover an increasing share of demand, the utilization of the installed

conventional power capacities is reduced. In the longer run, this results in a shift

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towards a higher share of peak load capacity and a smaller share of base load

capacity. In addition, sufficient backup capacity needs to be installed since only a

small share of the RES-E capacity can be counted as securely available capacity.

This results in a hardly reduced demand for conventional power capacity in order to

fulfill the required security of supply. Altogether the total installed (renewable and

conventional) generating capacity rises significantly to fulfill both the RES-E targets

and the system adequacy criterion.

7. Required Flexibilities in the Power Market The intermittent wind power and to a lesser extent photovoltaics infeed changes the

patterns of the power market in most regions significantly. In addition to demand

structures, especially wind situations become increasingly important for the power

plant dispatch. Especially hours with low demand and high wind power infeed

challenge the power system.

The model results show that in hours with low load and high wind power

infeed, notable shares of wind infeed are turned down. The absolute amount

of turned-down wind infeed rises over the years, which shows increasing

integration challenges. This indicates that the possibility of wind power

reduction is important to guarantee system stability at all times.

Additionally, the model requires a backstop technology, which is utilized if

generation from other RES-E exceeds load. This indicates demand for

additional flexibilities in the power system, which could be provided by various

measures, such as additional power storages, demand-side management in

industry or households, or more flexible RES-E infeed, e.g. through a more

demand-oriented dispatch of biomass-fired plants.

The model results also show that electricity exports increase in countries with

high shares of wind power. This indicates additional demand of both cross

border transmission capacities and national grid enhancements. The reason is

that wind power generation is relatively concentrated regionally compared to

other RES-E technologies and that the transport of electricity to demand

regions becomes increasingly challenging. Endogenous extensions of the

electricity grid were however not considered in this study.

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Comparison with BAU Scenario While in the HQS scenario, RES-E is supported by a Europe-wide technology-neutral

quota, in the BAU scenario promotion policies of every EU27++ country are modeled

in accordance with current policies. For the majority of countries this implies RES-E

support by a technology-specific feed-in tariff system. Differences in the outcomes of

both scenarios are thus influenced by a RES-E support which differs with regard to

the issues of price versus quantity-based support and technology-specific versus

technology-neutral support.

8. RES-E generation in BAU The mainly price-based support in BAU leads to a lower RES-E deployment than

HQS throughout the considered period. (In reality, of course tariffs are likely to be

adjusted, if failure of target achievement is anticipated.) Also in BAU the RES-E

share increases significantly to 32% in 2020. As in HQS the increase is largely driven

by the deployment of wind power, especially offshore-wind power. In addition, again

similar to HQS, biomass generation contributes significantly. In contrast to HQS,

rather expensive technologies like geothermal and especially photovoltaics play a

more important role.

9. RES-E costs in BAU In the BAU scenario the investment costs of bill. 412 €2007 (accumulated NPV 2008-

2020) are dominated by photovoltaics (44%) and sizeable shares of wind onshore

(19%) and offshore (15%) as well as biomass (13%).

When it comes to the comparison of the generation mix, RES-E capacities and

investment costs in BAU and HQS indicate that HQS contains potential efficiency

gains within the RES-E sector. A direct comparison of costs between BAU and HQS

is however problematic, due to the different quantity deployment paths. Thus, it has

been necessary to build an auxiliary scenario in which the harmonized quota

scenario reaches exactly the same RES-E amount as in the BAU scenario with the

same timely deployment path. Total RES-E cost savings of a switch from BAU to the

auxiliary HQS is 174 bill. €2007 net present value accumulated 2008-2020. These cost

savings arise from two effects, first due to the change from a national to a EU-

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harmonized support, and secondly due to the change from a mainly technology-

specific to a technology-neutral support of RES-E in Europe.

Comparison with the Cluster Scenario The cluster scenario is a scenario between BAU and HQS, in which the countries

which currently have a quota system (Belgium, United Kingdom, Poland, Romania,

Sweden) form a cluster and can thus benefit from harmonization effects within this

trade-cluster. Countries which currently support RES-E by feed-in tariffs, bonus

systems or tax incentives, are modeled as in BAU.

10. RES-E generation in Cluster On a EU27++ level the generation mix in the Cluster scenario does not change much

from the mix in BAU, as generation in the majority of countries in BAU have a FIT

system and are consequently not influenced by the quota cluster.

Within the cluster countries, it can be noticed that in 2020 Belgium, Romania and

Sweden generate less RES-E than in BAU. The three countries thus benefit from the

possibility to not fulfill their quota on their own but rather import TGC from UK and

Poland. As a consequence of the use of better RES-E locations, cost savings of 35

bill. €2007 accumulated NPV 2008-2020 compared to BAU can be realized.

11. Outlook Currently, many different promotion schemes for electricity generation from

renewable energy sources (RES-E) are in effect in Europe. A more harmonized

approach would enable to utilize considerable cost-savings in RES-E generation, as

a result of competition between plant locations. In addition, the introduction of

competition between technologies would lead to substantial cost-savings. Such

efficiency gains however have to be balanced with additional integration costs,

especially grid costs due to a regionally more concentrated deployment of some

RES-E technologies under a more harmonized and technology-neutral promotion

scheme. A detailed balancing of such costs and benefits of harmonization has not

been considered in this study.

Utilizing cost-efficient RES-E potentials throughout Europe is essential. Therefore, an

integrated geographical and intertemporal optimization is crucial to balance the

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different lead times, lifetimes and deployment times between the grid infrastructure

as well as conventional and renewable generating capacities. One can conclude that

while a more EU-harmonized approach to RES-E promotion than in place today is

certainly recommendable, a strategy for optimum integration of RES-E calls for

further research, encompassing aspects of both generation and transport of

electricity in Europe.

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1 Introduction

The aim of this study is to analyze scenarios of an increasing share of electricity from

renewable energy sources (RES-E) in Europe. Thereby the focus is twofold. First,

power market developments are analyzed depending on the applied RES-E

promotion policy. To promote RES-E this study includes the issues of price-based vs.

quantity-based support, technology-neutral vs. technology-specific support, and

national vs. EU-harmonized support. Second, this study focuses on the

repercussions of a deeper RES-E penetration on the conventional power market.

This includes issues like system adequacy and the increasing requirement for

flexibility of the power system in Europe until 2030.

Three working packages were necessary to analyze these two main goals. In a first

step a database of RES-E potentials, costs and support schemes has been built up,

covering the EU-27 (plus Norway and Switzerland – EU27++). Secondly, the “Linear

Optimization Model for Renewable Electricity Integration in Europe” (LORELEI) has

been developed. It deploys RES-E according to the underlying support schemes,

potentials and cost parameters. Finally, LORELEI has been linked to the Dispatch

and Investment Model for Europe (DIME), which models the conventional power

market by meeting the residual demand in an efficient manner. By means of this

model coupling, three different support scheme scenarios for electricity market

evolution in Europe until 2030 have been analyzed: A scenario applying an EU-wide

harmonized technology-neutral RES-E-quota (HQS), a Business-As-Usual (BAU)

scenario, extrapolating the current schemes in the Member States, and a hybrid

scenario in-between these two.

The report is structured in three Parts: The first part provides an overview on RES-E

support according to the current political landscape and discusses evaluation criteria

for RES-E promotion systems. The second part discusses the definition of the

considered scenarios, the employed models and their conventional and renewable

input parameters. And finally in the third part, the results of the computed market

scenarios will be discussed, and conclusions drawn to address implications for future

developments and research needs.

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PART I: RES-E Promotion Systems This first part of the report deals with RES-E promotion systems. First, in chapter 2, a

motivation for the research project is provided by a discussion of the status quo of

RES-E promotion in EU27++. This chapter includes a brief overview of the legislative

background of RES-E support and describes the status quo of RES-E shares, of the

RES-E generation mix and of the employed RES-E promotion systems in EU27++.

Chapter 3 focuses on the attributes of RES-E Promotion Systems. After a brief

definition of evaluation criteria for RES-E Promotion Systems, chapter 3 evaluates

attributes of RES-E promotion systems with regard to the afore defined criteria.

2 Motivation and Status Quo of RES-E Promotion The European Parliament adopted the “Climate Package” on December 17th, 2008.

Within this package, a new directive for the RES-E support has been defined. The

preceding renewables directive was adopted in 2001 (2001/77/EC). This directive

defined RES-E targets for the EU-15 and later for the EU-25. Since then, Bulgaria

and Romania joined the EU and received targets as well (see Table 2-1).

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Table 2-1: RES-E share 1997, 2006; RES-E targets in 2010

1997RES-EActual

2007RES-EActual

2010RES-ETarget

Austria 65.5% 59.8% 78.1%Belgium 1.0% 4.2% 6.0%Bulgaria 7.0% 7.5% 11.0%Cyprus 0.0% 0.0% 6.0%Czech Republic 3.5% 4.7% 8.0%Denmark 8.8% 29.0% 29.0%Estonia 0.1% 1.5% 5.1%Finland 25.3% 26.0% 31.5%France 15.2% 13.3% 21.0%Germany 4.3% 15.1% 12.5%Greece 8.6% 6.8% 20.1%Hungary 0.6% 4.6% 3.6%Ireland 3.8% 9.3% 13.2%Italy 16.0% 13.7% 25.0%Latvia 46.7% 36.4% 49.3%Lithuania 2.6% 4.6% 7.0%Luxembourg 2.0% 3.7% 5.7%Malta 0.0% 0.0% 5.0%Netherlands 3.5% 7.6% 9.0%Poland 1.8% 3.5% 7.5%Portugal 38.3% 30.1% 39.0%Romania 30.5% 26.9% 33.0%Slovakia 14.5% 16.6% 31.0%Slovenia 26.9% 22.1% 33.6%Spain 19.7% 20.0% 29.4%Sweden 49.1% 52.1% 60.0%United Kingdom 1.9% 5.1% 10.0%EU-27 13.1% 15.6% 21.0%

Source: BMU, 2009. Although the EU published the first RES-E directive in 2001, some countries started

already in the 1980s and 1990s with RES-E support (e.g. Denmark, Germany,

Spain). By now, the amount of RES-E generation has been growing constantly, as

can be seen in Figure 2-1.

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Figure 2-1: RES-E generation and shares in the EU-27, 1990-2007

0

100

200

300

400

500

600

1990 1997 2000 2001 2002 2003 2004 2005 2006 2007

RES

-E g

ener

atio

n [T

Wh]

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

RES

-E s

hare

of e

lect

ricity

con

sum

ptio

n

PhotovoltaicsGeothermalWindBiomassHydroRES-E share of gross consumption

Source: EWI, based on BMU (2009).

The main share of RES-E generation is based on large hydropower plants, which

show a considerable volatility over the years. However, although the amount of the

new renewable technologies, such as wind power and biomass power show a

significant increase, especially since 2000, it is striking that the RES-E share (black

line) remains more or less at the same level. This is not surprising, considering the

increasing electricity demand in some MS. This observation, amongst others,

contributed to the establishment of the 20% energy efficiency improvement target of

the EU until 2020, which is also considered in the climate package, however not yet

defined as a binding target.

The new 2008 directive has changed the approach compared to the 2001 directive.

Instead of RES-E targets, the directive defines RES targets for the final energy

consumption. This includes heating and cooling, transportation and electricity (RES-

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2020RES

TargetAustria 34%Belgium 13%Bulgaria 16%Cyprus 13%Czech Republic 13%Denmark 30%Estonia 25%Finland 38%France 23%Germany 18%Greece 18%Hungary 13%Ireland 16%Italy 17%Latvia 40%Lithuania 23%Luxembourg 11%Malta 10%Netherlands 14%Poland 15%Portugal 31%Romania 24%Slovakia 14%Slovenia 25%Spain 20%Sweden 49%United Kingdom 15%EU-27 20%

H&C, RES-T and RES-E). The Commissions distribution of the RES targets between

the MS is based on the 2005 RES shares, a flatrate addition and a GDP per capita

approach.3 The resulting RES targets can be seen in Table 2-2.

Table 2-2: RES-Targets in 2020

It is up to the MS to define targets for the individual

sectors. These targets need to be published in

National Action Plans until June 30th, 2010 (Directive

2009/28/EG). While some countries have already

defined RES-E targets for 2020 (e.g. Germany 30%),

others still have no long term strategy. This study

focuses on the RES-E promotion, which requires a

separate calculation of the national RES-E target

(see chapter 6.3).

Source: Directive 2009/28/EG (2009). Status Quo of RES-E promotion systems As described above, the 2001 RES-E directive has defined targets for all MS. The

overall target for the EU-27 is 21% (2010). Figure 2-2 provides an overview of the

current (2006) RES-E shares of the MS. It can be seen, that some countries are on

track to meet their target, while others need to strengthen their effort in order to

increase their RES-E share.

3 COM (2008).

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Figure 2-2: RES-E share in 2007 of EU27++ and corresponding 2010 targets

0

10

20

30

40

50

60

70

80

90

100E

U27

++

Aus

tria

Sw

eden

Latv

iaPo

rtuga

lD

enm

ark

Rom

ania

Finl

and

Slo

veni

aSp

ain

Slov

akia

Ger

man

y Ita

lyFr

ance

Irela

ndN

ethe

rland

sBu

lgar

iaG

reec

eU

nite

d K

ingd

omC

zech

Rep

ublic

Hun

gary

Lith

uani

aBe

lgiu

mLu

xem

bour

gPo

land

Est

onia

Cyp

rus

Mal

ta

Nor

way

Switz

erla

nd

RES

-E s

hare

of g

ross

ele

ctric

ity c

onsu

mpt

ion

0

1

2

3

4

5

6

7

8

9

1

Photovoltaic Power

Geothermal power plants

Biomass

Wind Energy

Hydro Power

Indicative targets 2010

Source: EWI, based on Eurostat data. The recently published progress report of the European Commission4 states, that it is

likely that the EU will miss its 2010 target of 21%. In 2006, the RES-E share of the

EU-27 has been 14.5%.

Currently, there is a variety of different RES-E support scheme designs installed in

the EU member states, since policy decisions in this field are in the responsibility of

the individual MS and the degree of coordination has not been decided yet. Chapter

3 provides an overview of the particular support schemes’ attributes and discusses

the main implications of the different designs.

For now, a differentiation between the main systems is sufficient. Currently 18

countries have chosen a price-based support, such as feed-in tariffs (FIT) or

premium systems to support their RES-E deployment. Six countries use quantity-

4 COM (2009) 192 final.

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based support, i.e. quota systems, and three countries have implemented a tax-

based support or other systems (see Figure 2-3). Also, some countries have hybrid

systems, which allow the RES-E producers to choose for example between a FIT or

a premium support or which are characterized by different support systems for

different technologies.

Figure 2-3: RES-E Support Schemes in the EU

Feed-in tariff systemTax incentives and other systems

Quota obligation systemBonus system

Feed-in tariff systemTax incentives and other systems

Quota obligation systemBonus system

Source: EWI. These historically grown uncoordinated national actions have lead to a RES-E

deployment, which in many cases is not based on the quality of the natural potentials

of the regions, but mainly on the kind of support a certain technology receives in a

particular region. Figure 2-4 and Figure 2-5 show the spread between the quality of

the natural resources, measured by specific electricity generation costs for the cases

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of wind power and photovoltaics, and their respective deployment, measured by

installed generation capacity.

Figure 2-4: Wind Power Qualities and Deployment in the EU27++ (2007)

Max. regional difference>100 €/MWh

489

1.7472.425

2.370

2.726

2.150

788

806

871

982

> 155135-155115-13595-11575-9555-75< 55

Specific generation costswind power [€/MWh]

Installedcapacitywind [MW] in 2007

3.124

22.247

15.145

386

Max. regional difference>100 €/MWh

489

1.7472.425

2.370

2.726

2.150

788

806

871

982

> 155135-155115-13595-11575-9555-75< 55

Specific generation costswind power [€/MWh]

Installedcapacitywind [MW] in 2007

3.124

22.247

15.145

386

Source: EWI

The color coding shows the regional electricity generation costs of a 1.6 MW wind

power plant. It can be seen, that wind power deployment mainly took place in

Germany, Spain and Denmark. These countries have been early starters and chose

FIT for their RES-E support. This picture becomes even more evident when it comes

to photovoltaics support. As can be seen in Figure 2-5, the best resources are

located in southern Europe. Although the generation costs between Spain and

Germany differ by more than 100 €/MWh, the deployment in Germany exceeds the

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Spanish one considerably. This as well can be attributed to the technology-specific

FIT support in these countries.

Figure 2-5: PV Power Qualities and Deployment in the EU27++ (2007)5

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 00

0

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

A u s tr i B e l g iu B u l g a C yp r

C ze ch R e pD e nm E s to n i F in l a F ra n

G e rm aG re a t B r it G re e

H u n g a Ir e la Ita lL a tv i

L i th u aL u x em b o

M a l t

N e th e r l a N o rw a P o l aP o r tu g

R om aS l ow a ki

S l o w e n Sp a iS w e d e

Sw i tze r l a

Reihe1

87

3.811

489

87

> 491474-491445-474425-445389-425344-389< 344

2424

18

24

33

47

16

16

Specific generation costsphotovoltaic power[€/MWh]

Installedcapacityphotovoltaics[MW] in 2007

Max. regional difference>150 €/MWh

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 00

0

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

A u s tr i B e l g iu B u l g a C yp r

C ze ch R e pD e nm E s to n i F in l a F ra n

G e rm aG re a t B r it G re e

H u n g a Ir e la Ita lL a tv i

L i th u aL u x em b o

M a l t

N e th e r l a N o rw a P o l aP o r tu g

R om aS l ow a ki

S l o w e n Sp a iS w e d e

Sw i tze r l a

Reihe1

87

3.811

489

87

> 491474-491445-474425-445389-425344-389< 344

2424

18

24

33

47

16

16

Specific generation costsphotovoltaic power[€/MWh]

Installedcapacityphotovoltaics[MW] in 2007

Max. regional difference>150 €/MWh

Source: EWI. A long discussion about the extent of harmonization has dominated the policy

formulation process of the 2009 RES directive. Already the 2001 RES-E directive

5 The specific generation costs of photovoltaics decreased significantly from 2007 until today. The investment costs for photovoltaics of 2009 are about 40% lower than in the year 2007. Within the modeling in this study this cost development is taken into account (see chapter 6.2.2.5 on investment costs and learning curve assumptions). However the conclusion which can be drawn from Figure 2-5 is not affected by a decrease of investment costs which occurred in all European countries. The reason for the imprtant differences between specific generation costs of the southern and northern European countries is not an absolute level of investment costs but the important differences of fullload-hours of photovoltaics in Europe.

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stated that a European support scheme harmonization is the long term goal, further

observations of the support scheme performances are necessary to completely

understand and evaluate the individual policy choices. Especially the possibility to

trade Guarantees of Origin (GO) between the MS and count them towards their

target has been heavily discussed during the latest process. While the first draft has

stipulated the possibility of GO trade with some open design issues, the adopted

directive clearly states in Article 15 that there will be no target counting of GO on

country level. However, Article 6 of the 2008 directive states that a statistical transfer

of RES amounts is possible on bilateral MS level. This possibility will not affect the

deployment decision of private corporations – these will still be solely based on the

national support scheme.

Some steps towards an actual harmonization are defined in Articles 7 – 10, which

describe the possibility of joint projects between MS, third countries as well as the

involvement of private corporations. Since the European Commission (EC) sees the

pros and cons of a harmonization, it shifts the responsibility to the MS with Article 11.

This Article opens the possibility of joint support schemes between MS. Therefore it

enables the MS to harmonize subsequently through the principle of subsidiarity. If

MS choose to support RES jointly, they can form a cluster, which could be open to

other MS if they choose so. Thereby, the directive maintains the status quo, which is

in the best interest of some countries and on the other hand enables other MS to

cooperate and gain from a potential harmonization process.

This study is motivated by the question which deployment results from the different

support scheme designs assumed in the scenarios. What could be the magnitude of

potential harmonization gains and what overall costs are necessary to fulfill the 2020

RES-E targets. Finally, the response of the conventional power market is of particular

interest.

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3 RES-E promotion policies As pointed out in the introduction, one aim of the study is to systematically analyze

the effect of different support systems on the deployment of RES-E by technology

and region within the EU and to quantify the associated costs. This has been done by

computing three different main scenarios in which the promotion systems differ

substantially. Differences in the promotion policies refer to the issues of (i) quantity-

based versus price-based support, (ii) technology-neutral versus technology-specific

support and (iii) national versus EU-harmonized support. In order to evaluate the

results of the different scenarios, it is important to understand how these

characteristics influence the extent to which the chosen evaluation criteria

effectiveness and efficiency are met in the different scenarios. Therefore we proceed

as follows: Section 3.1 gives a brief definition of the evaluation criteria. In section 3.2

the above listed characteristics of promotion systems are described and evaluated

with regard to their ability to meet the chosen evaluation criteria.6

3.1 Evaluation criteria for RES-E promotion schemes

Many different evaluation criteria have been elaborated to assess the success of

RES-E support schemes. The most prominent among them are effectiveness and

efficiency. But many different definitions of these are used, according to different

political or commercial interests. In this study, we use the economic definition of the

different criteria, which will briefly be explained below.

3.1.1 Effectiveness This criterion has two aspects: One is the stimulation of renewable energy expansion

and the other one is the accuracy in terms of target achievement. The aspect of stimulation is relevant if the objective of expansion does not include an

upper limit; therefore this interpretation of effectiveness is useful as a valuation

criterion when a minimum objective is set for a certain period of time. Accuracy

6 To exemplify the design variations that are applied in reality, four case studies of different MS can be found in the attachment.

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becomes relevant, when a certain quantity of renewable energy has to be reached at

a certain point in time.

3.1.2 Efficiency The term efficiency can be divided into two subsumable concepts:

Static efficiency means that, in a given period of time, a given output in terms of

RES-E (TWh) is produced from a minimum input (€) and can also be described by

the term cost efficiency. Another interpretation is the output-sided efficiency which is

acquired when a maximum output is generated from a given input.

Dynamic efficiency is a generalization of static efficiency which in addition includes

the concept of an optimal growth rate of renewable energy capacities. Thus it

addresses optimality of a time-path, associated with path-dependent falling unit costs

due to increasing maturity (usually the experience curve concept is applied in this

context). Therefore, the concept of dynamic efficiency includes a number of complex

issues. For instance, if the expansion of current RES-E technologies takes place too

fast and leads to the utilization of a great part of the existing potentials, it may delay

or prevent the expansion of future technologies with lower costs. Also, it can be very

important to invest in an infant and more expensive technology in order to have lower

RES-E costs in the long run. Among many other parameters, the evaluation of such

intertemporal trade-offs depend on the applied discount rate, which is a controversial

issue on its own. Thus, due to unsolved methodogical issues and a high degree of

uncertainty dynamic efficiency is difficult to measure. For this reason efficiency

comparisons between the different scenarios concentrate on static efficiency.

3.2 Classification of RES-E promotion schemes RES-E support systems can be classified with regard to three main criteria. First, in

section 3.2.1 quantity-based and price-based instruments are compared. Second, in

section 3.2.2 RES-E support systems the differences between technology-specific

and technology-neutral instruments are discussed. Section 3.2.3 focuses on the

difference between national and harmonized support systems.

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3.2.1 Quantity-based versus Price-based instruments Principally, there exist two different types of market-based promotion schemes for

renewable energies: quantity-based instruments and price-based instruments. In

economic theory, both types of instruments have the same economic effects, under

the assumption that the regulator has perfect information. If he does not, extreme

price reactions can result from “wrongly” set quantities and extreme quantity

deviations from “wrongly” set prices. Under uncertainty about optimal quantities and

prices, it is possible that mixed policies give better results than their unadulterated

versions.7 In reality, most of the countries which promote RES-E use variations of the

original support mechanisms. Some countries even use mixed policies for different

technologies; for example Denmark, which has a FIT system for most of the

technologies, uses auctions for offshore wind farms.

3.2.1.1 Quantity-based instruments Quantity-based instruments are implemented to reach a certain target for electricity

produced by RES (usually a percentage of RES-E in the electricity mix) by fixing the

amount of energy which needs to be provided by market participants. These

instruments have an inherent uncertainty about the price. In practise, quantity-based

instruments are mostly quota obligations.

Countries with quota systems place an obligation on the market participants

(producers, suppliers or consumers of electricity) to fulfil a certain percentage of their

produced, purchased or consumed energy with renewable energy. Usually, tradable

green certificates (TGC) form a substantial part of the system, i.e. the promotion of

RES-E takes place through a separate trading of TGCs which is working

independently from the physical electricity market. In the original form, the general

quota for one period is unalterable and it has to be fulfilled by every obligated party,

so that the obligation level has to be chosen very carefully. The quota has to be

sufficiently high to give the investors of RES-E technologies the necessary planning

security and thus stimulate their expansion. The target achievement, however, is

given in the quota obligation system per definition, otherwise penalties must be paid.

On the other hand, if the quota is set too ambitiously the dynamic efficiency of the

7 Weitzman, M. (1974).

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system may decrease. The static efficiency depends on the issue of technology-

neutral versus technology-specific support (see page 34).

While most quota systems have a technology neutral support, the banded quota system is an example for a technology-specific quota support system. In such a

system, the number of certificates issued to an operator of a RES-E plant depends

on the electricity generation technology. The number of certificates issued altogether

depends on the technology of the different power stations. Hence, the government

objective which prescribes a certain amount of certificates per MWh sold by a

supplier cannot provide for a definite amount of RES-E but has to form an

expectance of the future developments in order to determine the objective: How

much capacity will be built additionally? Which technologies will be preferred by the

investors given a certain banding? Only after having answered these questions, the

authorities can conclude how many certificates they should budget per MWh.

Such an approach is afflicted with a lot of imponderabilities, especially in terms of the

accuracy in achieving the RES-E target, which is supposed to be one of the strengths

of a quota system. Notwithstanding, banding of technologies implies the advantages

of a technology specific system, i.e. the promotion not just of technologies close to

marketability, but also of promising technologies in the stage of development.8

Other modifications of the original quota system design which have been

implemented in some countries, aim at reducing the investment risk which is higher

in a quantity-based than in a price-based support system, as in the first one the

certificate price and thus the producers’ incomes are uncertain. One possibility to

lower the investment risk is to restrict the amplitude of the TGC by the setting of

price limits. An upper price limit can be set in order to avoid too great impacts of low

quantities of certificates by imposing a penalty which has to be paid by committed

market participants if they cannot present the requested TGCs at the end of a trading

period. This penalty then simultaneously constitutes the upper limit for the TGC price.

A lower price limit by contrast prevents the TGC price to drop under a certain level,

however without approaching the underlying problem of too low a quota.

Banking and borrowing are further possibilities to increase planning security and

reduce the volatility of TGC prices. Banking means that TGCs that are issued to

8 For more details on the banding quota system, see the UK case study in the attachment, which also explains the buyout fund, which is a particular characteristic of the UK RES-E policy.

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RES-E producers in one trading period can be carried forward to a later period and

then be sold. If, for example, the quota set by a government or the respective penalty

price is too low, so that producers of RES-E fall short of the necessary extra revenue

from the TGCs because they are not able to sell them, banking gives the producers

the opportunity to realize the revenue by selling the TGCs in a later period. If, in

contrast, the quota is set too high to be fulfilled in one period, so that TGC prices

increase to a high level, the possibility to trade TGCs from previous periods will

alleviate the pressure on TGC prices.

Borrowing, by contrast, means that operators are allowed to sell TGCs that they have

not generated yet but that they are up to generate in the subsequent period.

However, borrowing currently does not appear in the existing European quota

systems.

3.2.1.2 Price-based instruments Price-based instruments set a fixed price or premium to stimulate the expansion of

electricity produced from RES. The quantity of produced electricity is dependent on

the (politically) set price or premium and therefore price-based instruments imply an

uncertainty about the quantity-outcome.

Feed-in tariffs (FIT) are regulated tariffs granted by the government to the producers

of domestic renewable electricity in form of a total price per energy unit (e.g. kWh) for

a certain period of time. The motivation behind setting fixed prices for RES-E is

ensuring a profitable operation to the producers. Usually, the system is combined

with a priority access to the electricity grid and a guaranteed purchase of RES-E,

which also gives additional security to investors.

If tariffs are high enough to provide investment certainty to producers, the FIT system

has a very high effectiveness in terms of stimulating the RES-E expansion. But, on

the other hand, if tariffs are set too high or too low, RES-E targets will be overfulfilled

or missed. Too high tariffs for particular technologies may negatively affect the

efficiency of RES-E deployment because relatively inefficient technologies

overexpand. In reality, in many FIT systems tariffs are regularly amended, which may

counteract an expected over- or underfulfillment of the targets. This regular amendment seems at first sight to be a factor that makes it more difficult for

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investors to plan assuredly. However, governments might generate planning

reliability by communicating their adjustment standards to the operators.

In general, the static and dynamic efficiency of the system depends on the particular

design of the FIT system, in case of the static efficiency on the question whether

support is technology-neutral or technology-specific.

Dynamic efficiency can be increased by the implementation of the regular

degression which is subject to the date of commissioning and applies to all

electricity generating installations put into operation after a certain point in time.

Mostly, the degression in the initial tariffs applies on a yearly basis. The intention is to

induce a technology development, thus under such a FIT system, the respective

technology would not be profitable any more after several years without innovations

and cost reductions.

On the other hand, some FIT systems include an inflation adjustment of tariffs.

Obviously, adjusting also the tariffs for plants to be erected prospectively reduces the

above mentioned pressure for the manufacturer to lower the costs of generation and

therefore to innovate.

Another special design characteristic of some of the FIT systems linked to the issue

of promotion costs is the detailed tariff differentiation. An instance of the

differentiation in terms of location and generating conditions can be found in the

German as well as in the French promotion system. In the latter, operator of wind

turbines erected in 2007 receive the full tariff of 8.2 €ct/kWh only for the first ten

years, whereas thereafter the remuneration is calculated subject to the full load hours

realized in the first ten years. The distinction corresponding to generating conditions

and technology details is a measure to reduce unnecessarily high payments to

operators of “basic” plants on the one hand and to allow for the promotion of a variety

of different technology mutations on the other hand. The distinction measures are

therefore actually an attempt to implement perfect tariff discrimination in the FIT

system by cutting down the producer surplus and, by doing so, to reduce the total

funding volume.

Premiums, in contrast to feed-in tariffs, are paid to the producer on top of the

conventional power market price. It is usually described as a variation of the FIT

system but it implies a higher risk for investors because the produced electricity has

to be merchandised on the conventional electricity market with the usual price risk.

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The premium, which is paid on top of the market price, is meant to help to cover the

production costs but in contrast to feed-in tariffs the overall income per unit is

variable. The effectiveness of this instrument depends on the level of the premium.

The static and dynamic efficiency are dependent on the specific design of the

system. As in FIT systems, technology-specific premiums and a possible degression

over time have effects on efficiency.

In order to limit the intrinsic uncertainties of a premium, some countries have

implemented upper and lower limits of the total remuneration (sum of market price

and premium) by designing a variable premium (for further details, see the case

study of Spain in the attachment).

Fiscal incentives usually have the form of tax exemptions or tax reductions from

certain taxes, e.g. carbon taxes. In countries where these taxes are very high the

exemption can be sufficient to stimulate RES-E production. But in most cases the

instrument is applied as a complement to other support schemes.

Beside the distinctions made until now, a further one is made between technology-

specific and technology-neutral RES-E support. As already mentioned, this attribute

can apply to both of the above mentioned types of instruments (quantity-based and

price-based).

3.2.2 Technology-specific versus Technology-neutral instruments Typically, technology-specific instruments are implemented to support infant

technologies in order to generate experience effects, which lead to cost reductions

On the other hand, technology-specific support is often justified by a value of a

broader RES-E mix in the future. In reality, FIT systems usually have technology-

specific tariffs, but they can be found in the other systems as well. Also, there are FIT

systems that are technology-neutral (i.e. the Maltese one).

To have technology-neutral instrument means that every produced MWh RES-E

has the same value. Therefore, systems which use this approach should lead to a

cost efficient deployment, by deploying the cheapest and usually most mature

technology at the best site. Quota systems often are technology-neutral but in many

cases there have been implemented variations which allow a technology-specific

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support; they can have either bandings (sub-quota for individual technologies) or a

different value for a MWh from a particular technology (e.g. one MWh from

photovoltaics stations receives two certificates).

3.2.3 National versus harmonized support systems RES-E support systems can further be distinguished with regard to their geographical

scope. National support systems define feed-in-tariffs or quotas which are applied

only within national borders. Generally, this implies that national targets have to be

reached by using only the RES-E potential within national borders. In the case of

harmonized RES-E support, a common quota or a common set of feed-in-tariffs is

applied in the harmonized region. This leads to a RES-E deployment at locations

where RES-E potential is most favorable.

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PART II: Scenarios, Methodology and Input Parameters The second part of the report deals with the methodological approach of the research

project. In Chapter 4, the different scenarios of support schemes which were

analyzed in the study, are described. Chapter 5 provides an overview of the two

linear optimization models which were employed to analyze the effect of the different

RES-E support schemes both on the RES-E deployment and on the conventional

power market. Chapter 6 describes both conventional and renewable input

parameters of the models.

4 Scenario definitions In order to analyze the RES-E deployment under different promotion policies as well

as the impact of a deeper RES-E penetration on the conventional power market,

three main and two auxiliary scenarios have been modeled. In the Harmonized

Quota system (HQS), a EU-wide, technology neutral RES-E quota is adopted. The

Business-as-usual scenario (BAU) extrapolates current promotion policies until 2030.

In the Cluster scenario, countries which currently have implemented a national quota

system, form a quota cluster, while policies remains unchanged for countries which

currently have implemented a feed-in-tariff system (respectively a tax incentive or

bonus support system). In the following, the different scenarios are discussed in

detail.

4.1 Main scenarios This section is supposed to provide an overview on the main scenarios, which will be

discussed in greater detail in the study results.

4.1.1 Harmonized Quota System (HQS) In the HQS scenario, a EU-wide technology-neutral quota enables competition

between the different RES-E technologies as well as competition between the

different European regions. The technology-neutral support in HQS leads to a

deployment of least cost technologies. The EU-wide quota ensures that RES-E

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capacities are built in countries with relatively high RES-E potentials and with hence

relatively low generation costs, as national RES-E targets do not have to be fulfilled

by each country on its own. The difference between national targets and the amount

of RES-E generation within a country is ex-post aligned by importing or exporting

TGC. These TGC streams are purely a matter of redistribution and do not have an

influence on the deployment within the model.

4.1.2 Business-as-usual (BAU) In BAU, the current promotion scheme of every modelled country is extrapolated.

Figure 4-1 depicts how each of the 29 countries is modelled in BAU with regard to

the support system. Especially, the technology-specific support has been integrated

in great detail. For example the degression of the tariffs in a FIT system is calculated

until 2030. The inflation adjustment has been integrated as well as the detailed tariff

differentiation according to quality of sites and resources. In case a country

implemented an option between a FIT and a premium system, the premium system

has been implemented in the model, because its incentives usually are more

beneficial than the fixed FIT option. Since electricity from PV can also be directly

consumed without feeding into a grid e.g. in a household (grid parity), the

endconsumer price (wholesale power price plus additional costs such as grid costs)

can become the relevant remuneration in case the feed in tariff becomes smaller

than the endconsumer price and of course if it is sufficient to cover PV RES-E

generation costs.

The quota systems have been implemented mainly in their pure form. Upper price

limits of the particular countries have been integrated. Since the optimization model

receives the RES potential exogenous without annual fluctuations, it works basically

as if banking and borrowing (which in reality provide a risk reduction against the

natural volatility of some RES) were integrated. Due to the above explained

uncertainty about the specific quota in the case of a banded quota system, the UK

quota system is implemented without technology specific RES-E values but as a

technology neutral quota system. Italy has been modelled as a premium system,

since the quota is only applicable for a relatively small share of the overall RES-E

target. In addition, through a conversion mechanism the TGC price is more or less

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fixed, which basically acts as a premium. Smaller installations in Italy are

remunerated by a FIT system.

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Figure 4-1: Modelling of country specific promotion policies in BAU scenario Country Comments

FIT

Prem

ium

Quo

ta

Promotion Period in years

Compulsory annual changes in tariffs for new plants

Discretionary changes in tariffs for new plants

Compulsory adjustment of tariffs for existing plants to inflation

Austria x 12 x Annual revision of tariffs. Year-by-year reduction for new plants regulated by law, but no instruction about size of cutback is given.

Belgium xBulgaria x 12Cyprus x 15Czech Republic x 15 x x Regular revision of tariffs, but there is no special requirement.

20;Exception: Offshore Wind (42,000 full

load hours)Estonia x 12

Finland x no limit The Finnish promote RES-E with excise duties. These work just like a premium.

20;Exception (15 years): biomass,

onshore wind, geothermalGermany x 20 x Tariffs for new plants are reduced annually by the inflation index.

Greece x 20 x Annual revision of tariffs: either adjustment to the change of PPCs approved bills or adjustment to inflation index.

Hungary x no limit x

Ireland x 15 xx

Annual adjustment according to inflation. However, it is up to the individual suppliers and generators to transpose this adjustment and incorporate in into their Powert Purchase Agreements.

15 years for alle technologies except for photovoltaics;

20 years for photovoltaic installations

Latvia x 10 x Tariffs are adjusted according to a formula including the trade final tariff for natural gas.

Lithuania x 20

Promotion System Characteristics of fixed-price-regulations

FIT is available only for all photovoltaic installations with a 20-year-price-guarantee and for all other technologies up to 200 kW for 15 years.Italy x

Denmark x

France xBoth for new plants as for existing ones there is a legally fixed adjustment. Tariffs for new plants are fully adjusted to inflation (except for wind), tariffs for existing plants only partially.

x x

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Country Comments

FIT

Prem

ium

Quo

ta

Promotion Period in years

Compulsory annual changes in tariffs for new plants

Discretionary changes in tariffs for new plants

Compulsory adjustment of tariffs for existing plants to inflation

Luxemburg x 15 x Legally implemented annual degression of tariffs for new plants.Malta x no limit

15 years for wind and photovoltaics;12 years for biomass

Poland xPortugal x 12-25Romania xSlovak Republic x 12 x x Tariffs for existing plants are usually adjusted according to inflation

index. Tariffs für new plants are revised annually.Slovenia x 10

20 years for wind, geothermal and ocean energy;

25 years for hydro, photovoltaics and solarthermal energy;15 years for biomass

Sweden x

United Kingdom x

Norway no promotion policy20 years for biomass, wind onshore

and geothermal;

25 years for hydro and photovoltaics

Promotion System

According to technology annual reduction of tariffs by 0,5% - 8%xSwitzerland x

Netherlands x

Spain x

Characteristics of fixed-price-regulations

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4.1.3 Cluster In the Cluster-scenario countries which currently have a quota system (namely

Belgium, Poland, Romania, Sweden, United Kingdom) form a cluster. This implies –

as in HQS – that these countries do not longer have to fulfil their national targets on

their own. Instead, RES-E is generated in the cluster countries with lowest generation

costs. Countries which currently support RES-E by feed-in-tariffs, bonus systems or

tax incentives, are modelled as in BAU.

4.2 Auxiliary scenarios The purpose of the following two scenarios is to ensure comparability of key figures

between the different main scenarios.

4.2.1 National Quota System This scenario was implemented in order to calculate harmonization gains, which

arise when countries do not necessarily have to fulfill their targets on their own but

are allowed to trade TGCs. In order to separate this effect, the HQS can be

compared with the National Quota System, which has been designed by the

requirement to fulfill the national targets within the national borders. Under both

systems, promotion schemes in every country rely on technology-neutral quotas.

Thus, differences observed between the two scenarios can be attributed to the

possibility of TGC trade existing only in HQS.

4.2.2 Harmonized Quota System with RES-E-targets as resulting in BAU-scenario This scenarios´ purpose is to ensure comparability of support and investment costs

between BAU and an appropriately modified HQS scenario.

As under BAU scenario most countries have a price-based support system, the

amount of RES-E capacities constructed is not the same as under HQS scenario

where RES-E support is quantity based in all countries. For this reason, a modified

HQS was computed, taking as quota obligation the amount of RES-E achieved in the

BAU scenario.

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5 Methodology

In order to optimize not only the RES-E deployment in all 29 countries (under the

different scenarios), but to take also into account the interdependence with the

conventional power system in every country, an iteration process of two models has

been implemented.9

The “Linear Optimization Model for Renewable Electricity Integration in Europe”

(LORELEI) calculates the optimal RES-E deployment in every country. Hourly RES-E

feed-in profiles which result from LORELEI calculations are an exogenous parameter

in the conventional “Dispatch and Investment Model for Europe” (DIME). This

approach simulates the preferential infeed obligation which is generally applied in FIT

systems. DIME calculates the cost-efficient deployment of the conventional power

system, needed to meet the residual demand in every country. The cost-minimizing

process includes the decision which amount of energy is imported or exported by a

country. The national power prices which can be deduced from the DIME calculations

are in turn important input parameters for the LORELEI model since the national

price level influences deployment of RES-E capacity.

This interdependence between LORELEI and DIME is illustrated in Figure 5-1.

9 For more details on the LORELEI-model see WISSEN (forthcoming). A more detailed description of the DIME-model can be found in the attachment.

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Figure 5-1: Interdependence between LORELEI and DIME

DIMECompetitive European

power market model

LORELEIEuropean RES-E model

Marginal costshourly

RES-E feed-in profiles

Source: EWI.

5.1 LORELEI

Figure 5-2 illustrates the optimization process within LORELEI. Important input

parameters concern the RES-E potential in every country (see chapter 5), current

and prospective RES-E generation costs and the amount and structure of already

existing RES-E capacities within each country. In addition, current and prospective

technical parameters of RES-E technologies (i.e. electric efficiencies) are input

parameters for the optimization process. Furthermore the optimal RES-E deployment

depends on the particular scenario (see Chapter 3). Under the quota system,

capacities of a specific RES-E technology are constructed as long as the sum of

marginal generation costs (calculated in DIME) and certificate price (determined

within LORELEI as a result of the quota obligation and the marginal costs of the most

expensive RES-E technology needed to fulfil the quota) exceed the generation costs

of this specific RES-E technology.

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Under the feed-in-tariff system, the investment decision for RES-E capacities is

based on the difference between generation costs of a specific technology in a

specific country and the feed-in-tariff for this technology within this country. In

addition, spot prices can also be decisive for investments under a feed-in-tariff

system in the case they exceed both, the generation costs and the feed-in-tariff. This

is more likely to happen in the long run under feed-in-tariff systems with substantial

degression rates, when in addition generation costs sink due to learning curve

effects.

Figure 5-2: LORELEI Model

LORELEI model

Linear optimization problem

Input Output

Short run RES-E expansion barriersSocial, technical, political barriers

Tariffs (for feed-in tariff system /

premium system)

Potential (e.g. available areas,

fuel potential)

Feed-in profiles

Economical parameters of current and prospective

RES-E capacitiesTechnical parameters of current and prospective

RES-E capacities

Existing RES-E capacities

Quota obligation (for quota system)

Installed capacities

Variable and fixed costs

Certificate price, weighted average

feed-in tariff

RES-E generation

Promotion payments

Marginal costs from

DIME-Model

Source: EWI.

LORELEI outputs are the RES-E capacities built in every country, as well as the

corresponding generation. Total variable and fixed costs of RES-E technologies also

result from LORELEI calculations. Moreover, as already mentioned, the certificate

price is computed in LORELEI. Consequently, the amount of promotion payments in

every country under every scenario can also be derived from LORELEI outputs.

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5.2 DIME DIME is a linear optimization model for the conventional European electricity market.

It is applied to simulate dispatch as well as investment decisions regarding the supply

side of the electricity sector. The objective function minimizes total discounted costs

based on the assumption of a competitive generation market.

Figure 5-3 depicts schematically the optimization process of DIME. Input parameters

can be divided into three major groups: demand side parameters, supply side

parameters and political parameters.

The demand which has to be met by conventional generation is the residual demand,

which is determined by subducting the exogenous generation from total demand.

Figure 5-3: DIME Model

Demand

Existing transmission capacities

Transmission losses

Fuel prices

Existing generating capacities

DIMELinear optimization problem

for competitive markets

Annual generation structure

Physical exchange

Technical properties of technologies

Commissioning and retirement of capacities by

technology

Residual demand

Politicalrestrictions

Economic properties of technologies

Total demand

Supply

Installed capacities

Plant dispatch by load level

Marginal generation costs

Variable and fixedgeneration costs

Fuel consumption

Carbon emissions

Input Output

Exogenous generation

Source: EWI.

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For this purpose first of all the RES-E generation computed in LORELEI is deducted.

In addition, the generation from following other technologies is treated exogenously

in DIME and thus deducted from total demand: large run-of-river, waste, large CHP

technologies outside Germany and small-scale CHP technologies (see Table C-1 in

the annex).

Regarding the supply side, important input parameters concern the costs of

generation (investment costs, O&M costs, fuel prices – see Chapter 6 for the

respective assumptions), technical parameters of conventional generation

technologies and the amount of conventional capacities already existing within a

country. The NTC values are another input parameter for the model, as they define

the amount of domestic demand which has to be met by domestic conventional

power generation respectively the amount of conventional power capacities which

can be built in countries with relatively low generation costs and exported to countries

with relatively high generation costs. Political input parameters include for example

decisions on nuclear policy.

As an output of the cost-minimizing process, the structure of generation and

capacities is identified for every country. Beside other outputs which are specified in

Figure 5-3, the crucial output for the iteration process is the resulting level of marginal

generation costs in every country.10 These marginal generation costs are interpreted

as spot prices and – as described above – are taken as input parameter for LORELEI

calculations.

10 Please note that here marginal generation costs also include capacity costs in peak hours and can therefore be interpreted as long-run marginal costs.

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6 Input Parameters

The following chapter provides a description of assumptions concerning the costs of

conventional power plants (fuel prices and investment costs) and the development of

power demand. Furthermore it provides inputs concerning nuclear policy and NTC

values. The second part of the chapter describes the RES-E input parameters in

more detail.

6.1 Conventional Input Parameters

6.1.1 Fuel and CO2 Prices Fuel price assumptions are depicted in Table 6-1. Short term assumptions are based

on futures, which are trades on exchanges. While world market prices have been on

exceptionally high levels in 2008, prices are currently on a downtrend due to the

current global economic situation and by assumption will rejoin their long term trend

in the medium term.

6.1.1.1 Nuclear Uranium prices increased during the last years as new nuclear plants were built

world wide, mainly in Asia and Eastern Europe. Further nuclear plants are still under

construction and will contribute to an ongoing rise in uranium demand. On the other

hand, higher uranium prices motivate further investments in the exploration of new

mines. Taken all effects into account, prices are assumed to decrease slightly from

2020 onwards.

6.1.1.2 Lignite Since energy production from lignite is only profitable at plants situated next to the

mines and since lignite is thus hardly traded, a world market price for lignite does not

exist. Lignite prices are therefore assumed to remain at the current level.

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6.1.1.3 Coal Global coal consumption grew at a high pace since 2000. In 2008 world market

prices for coal reached an exceptional high level due to a steep increase of demand,

due to unforeseeable events as flooded mines in Australia and the export stop from

China (caused by coal scarcity in the country itself) and finally due to a rise in supply

costs (increase in the cost of materials, diesel, labour and shipping). Currently, prices

are on a downtrend. The price assumption for 2010 is based on future contracts, plus

a supplement for transportation costs. In the long term, coal prices are expected to

rise only at a moderate pace. Global coal consumption will continue to grow, but at a

slower pace. In addition, global coal supply is also expected to rise. IEA (2008)

expects no capacity constraints until 2030. Known remaining reserves are assumed

to be more than adequate to meet the demand growth until 2030. Still, coal prices are

expected to follow a long term uptrend as the lowest-cost reserves are depleting

(causing higher supply costs and/or higher transport costs due to longer transport

distances), and as costs of materials, diesel, labour and shipping will also rise in the

long term.

6.1.1.4 Gas While the gas price is currently closely linked to the oil price, in the future gas prices

will be less influenced by oil price movements as an increasing share of gas is going

to be used in electricity generation, leading to a loosening in the close substitutional

relationship of gas and oil. Furthermore, the gas market will become more

competitive in the long term due to the ongoing liberalization of the gas market and

due to an increase in supplies of liquefied gas.

6.1.1.5 Oil In 2008, the oil market has been characterized by price levels largely exceeding long

term price trends. As in the coal market, prices for oil are currently on a downtrend,

assumed to rise again in the short term when worldwide economic situation will

recover (for 2010 the oil price is assumed to be 71 $/barrel). In the long term oil

prices are expected to increase at a pace according to a scenario in between IEA oil

price projections of 2007 and of 2008 – taken into account, that the 2008 projection

has been largely influenced by the temporarily sharply escalating prices in 2008.

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Thus, a price-path slightly above the average between the two IEA projections is

assumed: Input oil prices reach 87 $/barrel in 2020 and 104 $/barrel in 2030.

6.1.1.6 CO2 Prices EU Emission Allowances are currently traded at prices of about 10 Euros per tonne

CO2. Future prices are indicating that market prices will increase in the short and

medium term. In the medium as well as in the long term, CO2 prices are assumed to

increase due to the reduced amount of CO2 certificates which is expected to be

allocated in future periods.

Table 6-1: Fuel and CO2 – Price Assumptions Nuclear Lignite Coal Gas CO2

[€/t]2015 3.5 4.5 10.5 22.2 202020 3.3 4.5 11.1 24.2 252030 3.3 4.5 11.9 29.4 35

(€2007/MWhth)Year

Source: EWI.

6.1.2 Power Plant Investment Costs Power plant investment costs were determined by an analysis of investment costs of

lately completed power plants, of power plants being in the process of construction

and of planned power plants. EWI assumes that investment costs until 2015 remain

at the current level. Afterwards, coal plant investment costs are expected to

decrease, as current cost levels are strongly influenced by a temporary capacity

shortage.11

11 Carbon capture and storage (CCS) has not been considered in this study. Depending on cost assumptions, e.g. invest costs, coal and CO2 prices, as well as conversion efficiency losses, the share of coal-based generation could increase within the conventional power market. Usually, CCS deployment is assumed at higher CO2 prices than used in this study.

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Table 6-2: Conventional Power Plant inputs

Available YearInvestment

Costs[€/kW]

Lifetime Years

Net Efficiency

[%]Nuclear after 2010 2,200 40 33,0%Lignite before 2015 1,500 40 39,4%Lignite after 2015 1,350 40 43,0%Coal before 2015 1,350 40 46,0%Coal after 2015 1,200 40 50,0%CCGT before 2015 550 30 58,0%CCGT after 2015 550 30 61,0%OCGT before 2015 350 25 35,0%OCGT after 2015 350 25 40,0%Oil after 2010 450 25 40,0%

Source: EWI.

6.1.3 Electricity Demand The underlying demand assumption of this study is based on a study from DG-Env

(2008), which models the EU Policy Package and also takes the energy efficiency

targets into account. Table 6-3 depicts the demand levels resulting in the DG-Env

study until 2020 under consideration of the EU climate targets. Since these targets

are only defined until 2020 and thus not taken into account into the calculations for

the period beyond 2020, the DG-Env demand levels increase dramatically after 2020.

Therefore, for this study it is assumed that demand stays at the DG-Env 2020-level

until 2030. Even though targets beyond 2020 are not yet defined, it is unlikely that

there will be no target setting in the long-term. In addition, especially in the long-term,

electricity demand is influenced by opposing effects which in sum justify the

assumption of a stagnating power demand: While in the past, economic growth was

coupled to increasing power demand, energy efficiency due to technical development

has lead to a partial decoupling of power demand and productivity growth. In

addition, the catch-up effects of Eastern European countries which cause high

growth rates in the short-term, will have a smaller influence in the longer run. On the

other hand, additional demand on the electricity sector could be placed by energy

demand from other sectors (e.g. heat and transport).

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Table 6-3: Gross Electricity Consumption of all EU Member States (TWh) Country 2005 2015 2020 2030Austria 66 71 77 77Belgium 92 101 110 110Bulgaria 36 34 38 38Cyprus 4 5 5 5Czech Republic 69 73 105 105Denmark 38 34 35 35Estonia 9 11 12 12Finland 88 98 106 106France 510 541 573 573Germany 608 609 632 632United Kingdom 406 391 410 410Greece 63 67 70 70Hungary 42 47 49 49Ireland 27 31 34 34Italy 346 389 420 420Latvia 7 10 12 12Lithuania 11 14 16 16Luxembourg 7 7 8 8Malta 2 2 2 2Netherlands 118 130 129 129Norway 124 131 133 133Poland 144 161 176 176Portugal 53 66 71 71Romania 56 68 77 77Slovakia 28 34 39 39Slovenia 15 17 19 19Spain 289 339 362 362Sweden 151 163 162 162Switzerland 62 64 65 65EU27 3,287 3,512 3,745 3,745EU27++ 3,472 3,707 3,944 3,944

Source: EWI, based on DG-Env (2008).

6.1.4 Nuclear Policy The nuclear policy of the EU is under the responsibility of the individual MS. Due to

the different risk perception of nuclear accidents or the ultimate waste disposal, MS

decided differently about their nuclear policy. While some MS value the advantage of

relatively cheap base load electricity generation, others took consequences from e.g.

the Chernobyl incident and decided to phase-out of the nuclear based electricity

generation. Figure 6-1 provides an overview of the individual MS nuclear policy.

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nucleardecision to phase out or moratoriumexecuted phase outno nuclear

nucleardecision to phase out or moratoriumexecuted phase outno nuclear

Source: EWI.

A group of countries communicated a possible shift towards a nuclear renaissance.

Within this group, some have not enacted these plans yet and therefore are not

implemented in this study.12 However, since the nuclear policy in these countries

prohibit new constructions, some MS decided on a lifetime extension of existing

plants. Therefore, nuclear power plants in Spain and Sweden receive a lifetime 12 The recently elected German Government announced to step back from the phase out decision under consideration of safety standards and special arrangements regarding the absorption of producer rents.

Figure 6-1: EU Nuclear Policy

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extension to 50 years and in the Netherlands to 60 years. The extension requires

investments of 500 €/kW according to EWI/Prognos (2007) in order to fulfill the

required safety standards. Other MS, such as Italy and Poland announced plans to

erect new nuclear power plants and have laid the legal basis for this step. Therefore,

these countries have no nuclear policy constraints in this study.

6.1.5 Cross border transmission capacities As the focus of this study is not a grid analysis including endogenous grid

constructions, existing and planned cross border transmission capacities have been

taken into account corresponding to their net transfer capacities (NTC). The NTC

used in this study are mainly based on the ETSOVista data platform13 and on

UCTE14 publications for future grid development. Table 6-4 provides an overview of

the development of cumulated net import and export capacities. In case of future

projects, which are published without a corresponding NTC value but a flux voltage,

the capacity cannot be assessed since the intermeshing of the grid leads to loop-

flows.

13 See etsovista.org. 14 See ucte.org, e.g. UCTE Transmission Development Plan 2008.

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Table 6-4: Overview of Import and Export NTC in MW (Summer) Country Direction 2008 2010 2020 2030

Austria import 5,620 6,220 6,391 6,391export 4,900 5,500 5,696 5,696

Belgium import 5,100 5,400 5,659 6,659export 3,600 4,050 4,272 5,272

Bulgaria import 1,300 1,300 1,300 1,300export 1,550 1,550 1,550 1,550

Cyprus import 0 0 0 0export 0 0 0 0

Czech Republic import 4,350 4,350 4,506 4,506export 6,550 6,550 6,738 6,738

Denmark-East import 1,900 2,500 2,500 2,500export 2,300 2,900 2,900 2,900

Denmark-West import 2,630 3,230 3,273 3,273export 3,190 3,790 4,539 4,539

Estonia import 2,100 2,100 2,800 2,800export 2,100 2,100 2,800 2,800

Finland import 3,650 3,650 5,150 5,150export 1,950 1,950 2,650 2,650

France import 8,270 10,420 12,641 15,331export 13,800 15,300 17,511 19,911

Germany import 18,960 19,300 22,276 22,276export 13,710 14,050 16,852 16,852

United Kingdom import 2,080 3,400 3,502 5,502export 2,410 3,730 3,832 5,832

Greece import 1,450 1,450 1,450 1,450export 1,550 1,550 1,550 1,550

Hungary import 5,400 5,400 5,420 5,420export 3,200 3,200 3,200 3,200

Ireland import 410 410 410 410export 80 80 80 80

Italy import 6,590 7,440 9,679 9,679export 2,700 3,700 5,954 5,954

Latvia import 2,250 2,250 2,250 2,250export 2,200 2,200 2,200 2,200

Lithuania import 2,980 2,980 4,730 4,730export 3,980 3,980 5,730 5,730

Luxembourg import 860 860 860 860export 860 860 860 860

Malta import 0 0 0 0export 0 0 0 0

Netherlands import 6,700 8,020 9,829 9,829export 6,500 7,820 9,604 9,604

Norway import 3,350 3,350 4,650 4,650export 3,900 3,900 4,600 4,600

Poland import 2,700 3,040 4,132 4,132export 3,300 3,640 4,807 4,807

Portugal import 1,100 1,200 2,800 2,800export 1,200 1,300 3,000 3,000

Romania import 2,250 2,250 2,410 2,410export 1,950 1,950 2,110 2,110

Slovakia import 3,450 3,450 3,539 3,539export 4,050 4,050 4,050 4,050

Slovenia import 1,670 1,670 1,730 1,730export 2,430 2,430 2,430 2,430

Spain import 2,400 3,700 5,466 6,866export 1,600 3,400 5,110 6,800

Sweden import 6,940 6,940 7,770 7,770export 6,880 6,880 8,430 8,430

Switzerland import 6,840 7,240 7,589 7,589export 9,960 10,210 10,755 10,755

Source: EtsoVista, UCTE, EWI.

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6.2 Renewable Energy Input Parameters The research of RES-E potentials and costs has been an important part of the study.

In this chapter, the determination of RES-E input parameters is described for each

technology (wind on- & offshore, biomass, photovoltaics, concentrating solar power,

geothermal energy, tidal and wave energy, small hydro power). In Section 6.2.1, the

Status Quo with regard to installed RES-E capacities and their technical lifetimes is

presented. Section 6.2.2 provides a description of the potential and cost analysis of

each RES-E technology. Section 6.2.3 gives an overview of the RES-E potential for

each technology in each of the EU27++ countries and of the RES-E generation costs

for all technologies in 2010, 2020 and 2030, which result from the analysis.

6.2.1 Status Quo of RES-E Capacities In Figure 6-2 the installed capacities in the EU27++ countries in 2007 can be seen. It

is striking that in Germany and Spain the most capacities have been built especially

in terms of wind onshore and photovoltaics capacities.

Figure 6-2: Installed RES-E capacities in EU27++ countries in 2007

0 5 10 15 20 25 30 35

SwitzerlandNorway

UKSweden

SpainSloveniaSlovakiaRomaniaPortugal

PolandNetherland

MaltaLuxemb.Lithuania

LatviaItaly

IrelandHungaryGreece

GermanyFranceFinlandEstonia

DenmarkCzech

CyprusBulgariaBelgiumAustria

GW

wind (onshore)wind (offshore)biomassphotovoltaicsgeothermal energyconcentrating solar powerwave energytidal energysmall hydro power

Source: EWI based on statistics.

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While in some countries a significant amount of renewable capacities has been

installed in others the expansion has been marginal. Apart from some exceptions

such as Belgium or the Czech Republic this applies especially to the new member

countries.

When adding the technical lifetime of each technology the development in technical

terms of current installed capacities in EU27++ can be deducted. Except for small

hydro energy and concentrating solar energy which have technical lifetimes of 35 and

25 years respectively, the technical lifetime of renewable energy technologies is fixed

at 20 years. In Figure 6-3 it can be observed that current installed capacities will be

reduced modestly until 2020 and nearly completely until 2030. Only small hydro

power will not be depleted. Existing small hydro power plants can be repowered at

comparably beneficial costs’ so that additional support is not necessary.

Figure 6-3: Development of current renewable capacities in EU27++ countries

0

20

40

60

80

100

120

2010 2015 2020 2025 2030

GW

wind (onshore)wind (offshore)biomassphotovoltaicsgeothermal energyconc. solar powerwave energytidal energysmall hydro power

Source: EWI based on statistics.

6.2.2 Technology specific analysis of potential and costs of RES-E In this section, the specific input parameters of each RES-E technology are

explained. These parameters include the potential, investment costs and operating

and maintenance (O&M) costs and the full load hours of each technology. Before

discussing the parameters for each technology, steps in the assessment approach

which are common to all technologies will be explained.

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Potential The concept of potential applied in this study, corresponds to the realizable potential

which differs considerably from other existing notions of potential, i.e. from the

theoretical and technical potential shown in Figure 6-4.

Figure 6-4: Different concept of RES-E potential

Theoretical Potential

Technical Potential

Realizable Potential

technical, ecological and legislativerestrictions

restrictions of production capacity andother temporary restrictions

Source: EWI, based on Kaltschmitt/Streicher/Wiese (2006). The theoretical potential corresponds to the physically useable amount of energy

supply at a given point or period of time and for a given region (i.e. the sun irradiation

on the earth within one year). Due to technical, ecological, structural and

administrative barriers, only a small part of the theoretical potential can actually be

used for electricity generation. The technical potential characterizes the part of the

theoretical potential, which is usable under the consideration of technical, ecological

and legislative restrictions while the realizable potential takes further into account

restrictions of production capacity and other restrictions which form short to medium-

term barriers to RES-E deployment.

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Investment and O&M costs For every technology current (2007) investment costs15 as well as operating and

maintenance (O&M) costs are identified. While investment costs are allocated over

the whole depreciation period, O&M costs fall due every year. The cost fraction of

unskilled labor is adjusted across countries according to a wage index16. Thereby

wage dissimilarities are supposed to decline over time. However, a complete

alignment will not be achieved as labor is not completely mobile. In contrast, the non-

labor intensive cost share is assumed to be equal across countries. Hence, apart of

wage dissimilarities differences in electricity generation costs across countries are

primarily caused by different full load hours and varying site qualities respectively. In

case of biomass electricity generation costs are further influenced by fuel prices and

heat bonuses.

Future cost developments are for the most part calculated by using the experience

curve concept.17 In this model the experience curve of type 1 has been used which

means that cost reductions are attributed only to investment cost reductions and thus

are expressed in €/kW. With increasing cumulative installed capacity investment

costs are reduced by learning effects. It is assumed that the learning process takes

place essentially at a global level, i.e. future global expansion has to be considered.

Nevertheless, increases in technological efficiency have been taken into account

either by including separate technology types or by allowing directly for increases in

efficiency.

The cost reduction of less mature technologies such as photovoltaics, concentrating

solar power,18 tidal and wave power plants is significantly higher than for already

experienced technologies.

15 Note that costs in this study are prices for the particular technology. Real costs would eliminate the margins within the value chain. These margins could be lower if companies order very high volumes of a particular technology. Therefore, it is possible that the prices assumed in this study differ from the prices some companies can realize at the market. Eliminating the margins of the value chain is unfortunately not possible due to the lack of information. 16 Eurostat (2008). 17 IEA (2000). 18 In case of concentrating solar power the cost reduction is largely caused by economies of scale effects due to a bigger plant size.

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Amortization The discount rate is set at 8.5% p.a. The deprecation period for the renewable

energy technology classes but small hydro power amounts to 15 years. Due to its

higher technical lifetime small hydropower is depreciated over a longer period of 25

years.

Specific parameters of the renewable energy technologies

In the following, parameters specific to each technology are explained. To this belong

amongst others the differentiation of the technology classes in several

subtechnologies, the differentiation of different subregions as well as the way

potential and costs have been determined.

6.2.2.1 Wind Onshore First of all, 57 subregions are distinguished to allow for a very detailed examination

taking into account the different local conditions for wind energy in these regions (see

Figure 6-5). The subdivision of the different European countries into subregions is

done by ensuring that within one subregion wind conditions are approximately the

same.

Figure 6-5: Subregions for Wind Onshore in Europe

Source: Eurowind.

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For onshore wind turbines, there is made a distinction between seven

subtechnologies differing in capacity size, hub height, rotor circular surface and area

required by a single wind turbine.

Table 6-5: Subtechnologies of wind onshore

Subtechnology Feasibility Capacitiy [MW]

Hub Height [m]

Rotor Circular Surface

[m2]

Area required by a single

Wind Turbine [km2]

windtech_1 2007 0.3 42 804 0.026windtech_2 2007 0.85 66 2,042 0.065windtech_3 2007 1.60 84 4,299 0.137windtech_4 2007 3.05 88 6,359 0.203windtech_5 2007 4.50 111 9,847 0.314windtech_6 2011 6.00 124 10,202 0.325windtech_7 2016 8.00 140 13,267 0.423

Source: EuroWind, EWI.

As shown in Table 6-5 the wind turbine technologies have different time horizons for

their feasibility. The smaller five categories (windtech_1 to windtech_5) already exist

and represent typical classes of wind turbines installed in Europe.19 The last two

categories (windtech_6 and windtech_7) are expected to be developed until 2015

and 2020 respectively.

Wind onshore potential To calculate the potential of onshore wind energy within the subregions as applied in

this study the following steps are made: The suitable areas for the wind power

generation are calculated by EuroWind. Areas which have a mean wind speed of

less than 5 m/s in a height of 100 m a.g.l. (above ground level) are omitted.

Furthermore, forest, sea, rivers and urban or industrial areas are excluded.

Wind onshore costs The investment costs of onshore wind turbines depend on capacity and on national

labor costs. For example in Germany costs are the following:

19 EuroWind.

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Table 6-6: Investment and O&M costs for wind onshore in Germany in 2007

SubtechnologyInvestment

costs[€2007/kW]

Annual O&Mcosts

[€2007/kW]windtech_4 1,261 50windtech_5 1,647 50windtech_6 1,647 50windtech_7 1,647 50

Source: EuroWind.

A literature review on global experience curves for wind turbines20 reveals that on

average the so-called progress ratio is about 0.93. This means that with each

doubling of the installed capacity costs decline by 7%. As mentioned before this cost

reduction is only related to installation costs. The development of O&M costs is

included by the assumption that the O&M costs constitute a constant share of the

investment costs across the whole operating period of each turbine. In Figure 6-6 the

electricity generation costs of wind onshore in 2007 can be seen.

Figure 6-6: Electricity generation costs of wind onshore in 2007

0

50

100

150

200

250

300

350

400

450

500

Austria

Belgium

Bulgaria

Cyprus

Czech

Republic

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Latvia

Lithuania

Luxembourg

Malta

Netherla

nds

Poland

Portugal

Romania

Slovakia

SloveniaSpain

Sweden UK

Norway

Switzerla

nd

€ 200

7/MW

h

Median

Source: EWI.

20 IEA (2000), Neij et al. (2003), Junginger et al. (2005).

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Wind Onshore Full Load Hours As mentioned above, wind data are provided by EuroWind. Measurements of more

than 350 stations are examined over 10 years, from 1997 to 2006, with a high time

resolution from one to three hours. Out of these data a typical wind year for Europe is

identified (2002). Based on the wind data from this year 57 subregions are created as

described above. National borders are also considered while creating the subregions.

For each of them, a load curve for wind is generated. Then the energy output for

each subtechnology in each subregion is calculated out of the corresponding load

curve. Factors included in this calculation are: air temperature, air density, roughness

length, and typical ground elevation, the power curve of the subtechnology, hub

height, and rotor diameter.

The result from this is a number of energy outputs for each subtechnology in each

subregion. A matrix of wind onshore full load hours is calculated from these energy

outputs and flows in the LORELEI model.

6.2.2.2 Wind Offshore The subtechnologies of offshore wind turbines differ in capacity size, hub height and

rotor circular surface. Three subtechnologies have been defined (see Table 6-7). As

shown in Table 6-7 the wind turbine technologies have a different time horizon for

their feasibility. The smallest category (windtech_1) exists already and represents the

current state of the technology in European offshore windfarm projects. The last two

categories (windtech_2 and windtech_3) are expected to be developed from 2016

and 2021 onwards respectively. The capacity of each subtechnology is given in MW.

The last column contains the required space for each wind turbine in km².

Table 6-7: Subtechnologies of wind offshore

Subtechnology Feasibility Capacity [MW]

Hub Height [m]

Rotor Cirular Surface

[m2]

Area required by a single Wind Turbine

[km2]windtech_1 2007 5 90 11,310 0.706windtech_2 2016 8 110 18,869 1.177 windtech_3 2021 10 130 24,053 1.501

Source: EWI.

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Wind offshore potential The potential of offshore wind energy in the subregions is calculated in the following

way: First, the marine surface area of each country is detected and then divided in

such a way that the areas match with the offshore subregions that have been defined

before. The offshore subregions represent the spatial distribution of different marine

areas and different water depths. The distinction is made between shallow waters

and high water depths. This corresponds to a water depth of up to 20 m and from 20

m to 40 m, respectively. All areas with a water depth higher than 40 m are omitted in

order to attain only the suitable areas for the installation of offshore wind turbines.

Moreover, competing usages such as routes of transports, military areas or protected

areas are taken into account.

Wind offshore costs The investment costs of offshore wind turbines depend on the water depth at the

installation field. In the case of Germany costs have the following values:

Table 6-8: Investment and O&M costs for wind offshore in Germany

SubtechnologyInvestment

costs [€2007/kW]

AnnualO&Mcosts

[€2007/kW]SWD (up to 20m) 3,200 121HWD (20 to 40m) 3,560 121

Source: EuroWind; EWI.

In Figure 6-7 the electricity generation costs of wind offshore in 2007 can be seen.

The progress ratio for offshore wind turbines has been defined at 0.91. This means

that with each doubling of the installed capacity, costs decline by 9%.21

21 Jamasb (2007).

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Figure 6-7: Electricity generation costs of wind offshore in 2007

0

50

100

150

200

250

300

350

400

450

500

Belgium

Denmark

France

Germany

Greece

Netherla

nds

Portugal

Spain

Sweden UK

Norway

€ 200

7/MW

h

Median

Source: EWI.

Wind Offshore Full Load Hours The calculation of the full load hours for the different wind offshore subtechnologies

in the 18 offshore subregions follows the same methodology as in wind onshore. The

only difference is the time resolution of wind speed data which is six hours.

6.2.2.3 Biomass In case of biomass data have been provided by IE Leipzig. As shown in Table 6-9

biomass is distinguished in three different categories. The categories are: solid

biomass, biogas, and liquid biomass. Solid biomass, contains energy crops such as

wood from short rotation plantation, corn, agricultural residues, like straw, logging

residues, used wood, and dry sewage sludge. Due to many different applied

technologies in practice three different plant sizes have been chosen as reference

plants. Biogas plants form the second category. Mainly silo maize silage, liquid

manure, dung, grass silage and biogenic settlement waste are gasified. This

category consists of two plant sizes. Oily plants like rape and sunflowers are used for

extracting liquid biofuel. Internal-combustion engines convert the liquid biofuel to

power. Because of the comparatively small quantity only one plant size is taken into

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consideration. Other biofuels like bioethanol are used primarily in the traffic sector.

For the calculations it was assumed that the future use of biomass occurs for the

energy sector only in combined heat and power plants.

Table 6-9: Subtechnologies of biomass

Category Subtechnology Capacity [MW] Fuel

biosolid_1 0.5biosolid_2 5.0biosolid_3 20.0biogas_1 0.5biogas_2 5.0

bioliquid bioliquid 0.2 rape, sunflowers

biosolid energy crops, agricultural residues,forestry, used wood, sewage sludge

biogas silo maize, grass, manure

Source: IE Leipzig. Biomass Potential Biomass potentials are derived taking into account natural resources and ecological

conditions. The biomass potential of a country refers to the potential it has by its own

resources – biomass imports are therefore not considered. The highest potential is

located in France, Germany, Spain and Hungary. Only a small part of available

potential is currently used. Restrictions such as competing land use are included in

the analysis.

In general the highest potential has solid biomass, in particular forestry, used wood

and energy crops. In case of energy plants an expansion of the cultivation areas and

increases of the yield per acre is presumed. In 2030 they have the highest potential.

For biogas a moderate expansion of the potentials exists. Liquid biomass in general

plays a rather subordinated role.

Biomass Cost With increasing power plant size investment and O&M costs decrease (see Table

6-10). Liquid biomass power plants have the lowest investment costs, however also

high fuel costs. According to IE Leipzig investment and O&M costs decrease until

2030 by about 10%.

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Table 6-10: Biomass investment and O&M costs in Germany in 2007

SubtechnologyInvestment

costs [€2007/kW]

Annual O&M costs

[€2007/kW]biosolid_1 6,700 549biosolid_2 3,470 380biosolid_3 2,180 142biogas_1 3,168 309biogas_2 2,673 265bioliquid 1,740 225

Source: IE Leipzig.

In Figure 6-8 the electricity generation costs of stand-alone biomass in 2007 can be

seen.

Figure 6-8: Electricity generation costs of stand-alone biomass in 2007

0

500

1000

1500

2000

2500

Austria

Belgium

Bulgaria

Cyprus

Czech

Republic

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Latvia

Lithuania

Luxembourg

Malta

Netherla

nds

Poland

Portugal

Romania

Slowakia

SloweniaSpain

Sweden UK

Norway

Switzerla

nd

€ 200

7/MW

h

Median

Source: EWI.

Fuel costs will rise until 2030 due to increasing demand. However, for the disposal of

manure a fee must be ordinarily paid. In these cases no fuel costs result. Due to the

costly processing and a specific required technology the costs for sewage sludge are

relatively expensive.

In the calculation of the power production costs it is assumed that produced heat

receives a heat bonus. The amount of the heat bonus depends on the price for

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alternative heat technologies like gas and differs between the countries. The future

development of the heat bonus is coupled to the gas price development.

Biomass Full Load Hours Because of the high investment costs a high load is necessary to recover fixed costs.

Table 6-11 shows the full load hours for new plants.

Table 6-11: Biomass full load hours

Subtechnology Full load hours

biosolid_1 7,500biosolid_2 7,700biosolid_3 7,500biogas_1 7,500biogas_2 7,500bioliquid 6,500

Source: IE Leipzig.

6.2.2.4 Biomass Cofiring The development of biomass cofiring is not part of the optimization process, due to

the model-based disconnection between the conventional power market and the

RES-E market. Comparable to the large hydropower development, a predetermined

path is assumed. In a first step, the current European cofiring status has been

assessed by literature research.22 According to IE Leipzig (2006) the cofiring in coal

fired power plants is the preferred option from an economic point of view. Therefore,

it is assumed that the biomass cofiring development is linked to the electricity

generation from coal fired power plants. Although, the cofiring share is rising until

2030, the absolute biomass cofiring generation shrinks at a certain point of time,

since the coal based power generation will be reduced in the future. The required

biomass potential for this development path is calculated and reduces the biomass

potential, which is available for the pure biomass power generation.

6.2.2.5 Photovoltaics Due to significant cost differences between different plant sizes three typical

photovoltaics plant sizes have been deemed necessary to cover the relevant cost

range (see Table 6-12). The smallest plant size of 4 kWp represents the typical small

22 www.ieabcc.nl (2008), IE Leipzig (2006).

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residential roof top system. 23 Middle sized systems are set at an installed capacity of

30 kWp. Large-scale plants are defined as all sizes of 1 MW and more. The latter is

typically built on the ground rather than on top of a roof. All plant sizes are assumed

to have crystalline modules.24

Table 6-12: Subtechnologies of photovoltaics

Subtechnology Capacity[MW]

Place of installation

pv_1 0.004 roofpv_2 0.030 roofpv_3 1.000 base

Source: EWI.

In order to get as detailed data for energy earnings as possible, subregions are

further introduced.

Photovoltaics potential Corresponding to the manner of construction the photovoltaics potential has been

subdivided into two distinct parts. While for those technologies that are mounted on

roofs a maximum roof area suitable for photovoltaics applications has been

determined, a maximum ground area has been determined for large-scale plants.

Concerning the roof area potential basically the approach of Gutschner and Nowak

(2002) has been used. This approach is based on the estimation that every 1m² of

ground floor area results in a solar architecturally suitable roof area of 0.4 m². The

calculation takes into account architectural suitability (including construction,

historical and shading elements) and solar suitability, defined as surfaces with “good”

solar yield (≥ 80% of the maximum local annual solar input). Regarding the base area

per capita country-specific data is taken. Otherwise the statistical value of 45m² per

capita (including residential, agricultural, industrial, commercial and other buildings)

is used. This is a typical value for Central Western Europe. Generally, densely

populated areas have less area per capita available and visa versa. Furthermore a

roof area of 3m² per capita for solarthermal heat use has been subtracted. The

potential for each country is split into subregions by applying statistical data of

inhabitants per region. As this approach for roof area potential (in m²) is based mostly 23 EEG-Erfahrungsbericht (2007). 24 During the last few years, thin film modules increased in their importance.

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on capita per region, countries with large population like e.g. Germany have a high

potential. The potentially useable are for the installation of large-scale photovoltaics

plants is identified by summing up the area of arable lands and the grasslands of

each country.25 Competing land uses are considered (e.g. agriculture).

Photovoltaics costs On the one hand the cost analysis has been based on observable module price

indices.26 The lower end of all observable net retail prices gives an indication for real

costs. Furthermore, the cost analysis is complemented by market surveys and

interviews. For modules our analysis resulted in 3.10 €/W. In case a higher quantity

of modules is demanded prices decrease to below 3 €/W. Adding Balance of System

(BoS) costs and the costs for installation a range in the investment costs of between

4,050 €/kW and 4,450 €/kW in Germany results (see Table 6-13). It has to be

mentioned that cost-differences between the two smaller plant sizes are substantial

whereas economics of scale are declining with increasing plant sizes.

Table 6-13: Investment and O&M costs of photovoltaics in Germany

SubtechnologyInvestment

costs [€2007/kW]

Annual O&M costs

[€2007/kW]pv_1 4,450 45pv_2 4,200 44pv_3 4,050 41

Source: EWI based on Solarbuzz (2008), IEA (2008). In Figure 6-9 the electricity generation costs of photovoltaics in 2007 can be seen.

25 CIA(2007). 26 Solarbuzz (2008), IEA (2008).

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Figure 6-9: Electricity generation costs of photovoltaics in 200727

0

100

200

300

400

500

600

700

800

900

Austria

Belgium

Bulgaria

Cyprus

Czech

Republic

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Latvia

Lithuania

Luxembourg

Malta

Netherla

nds

Poland

Portugal

Romania

Slovakia

SloveniaSpain

Sweden UK

Norway

Switzerla

nd

€ 200

7/MW

h

Median

Source: EWI. The future investment cost development depends on global deployment. According

to Staffhorst (2006) typical progress ratios range between 76% and 84% depending

on national policies, regional differences, technical shifts and maturity of technology.

On average other studies on worldwide module prices analyzed by Staffhorst show a

value of slightly below 80%. Unfortunately, the literature on BoS learning curves is

scarce. However, Schaeffer et al. (2004) find BoS-progress ratios of 78% for

Germany and 81% for the Netherlands. Therefore, this study assumes a progress

ratio of 80%, i.e. with every doubling of the installed capacity a decline in system

prices by 20% occurs.

The future development of the O&M cost share that comprises material costs is

similar to the investment cost development. The other part of variable costs which is

27 The specific generation costs of photovoltaics decreased significantly from 2007 until today. The investment costs for photovoltaics of 2009 are about 40% lower than in the year 2007. Within the modeling in this study this cost development is taken into account. However the differences between the electricity generation costs of photovoltaics in the different European countries shown in Figure 6-9 persist also for the case of an investment cost decrease which occurred in all European countries. The main reason for the differences in electricity generation costs depicted in Figure 6-9 is the difference of full load hours between the countries (see also Figure 2-5).

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based especially on labor, rent, insurance and other costs is assumed to remain

constant over time.

We assume the possibility of net-metering for small PV plants.. Therefore, the

relevant price here is the price to the end-consumer and not the wholesale market

price. Thus the relevant price includes also grid costs as well as taxes and levies.

This so-called grid parity option is included in this study. However, open questions

remain regarding the comparability between household consumer price and PV

electricity generation costs. The main question is a matter of cost allocation, which is

subject to grid regulation. Grid costs form roughly one third of the consumer price (in

€/kWh). If a household with a roof-top PV installation reduces its net consumption,

other users need to cover the grid costs instead. Therefore, and since grid costs are

dominated by fixed (capacity-related) costs, rather than by variable costs, in the long

run, and especially in the context of increasing PV electricity fed into the grid based

on grid parity, grid regulation may shift from a €/kWh calculation to a more access

based €/kW calculation. In this case, the level for grid parity is reduced from e.g.

21ct/kWh to 14 ct/kWh, since the grid access is paid on a separate bill. In addition it

is a decision of the government whether or not taxes and levies need to be paid also

on electricity from PV based on grid parity. In this case, the wholesale power price

would be the correct cost comparison.

Photovoltaics full load hours Basis for full load hour calculation is the hourly irradiation data for all European

regions by the database Meteonorm 6.0. Combined with regional and hourly data for

temperature, the inclination angle, kind of system-elevation and the performance

ratio28 which includes deviation from optimal output caused by efficiency losses of

cables or inverters full load hours are resulting. In the past an improvement of the

performance ratio could be observed. With every cumulative doubling in the

installation, the performance ratio will improve by nearly 2%.29

28 The performance ratio is defined as the ratio of real output and optimal output. 29 In this study a progress ratio of 1,017 for the performance ratio is set (Staffhorst, 2006).

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6.2.2.6 Geothermal Energy For the conversion of geothermal energy into electricity there are different

technologies available, their application being tied to special geological conditions.

Three geothermal subtechnologies are differentiated.

First, one has to separate hydrothermal and petrothermal resources. Hydrothermal

resources are natural deposits of thermal fluids which can be developed by simply

delivering the fluid and reinjecting it after having extracted the heat. They are

distinguished by their thermodynamic potential, i.e. their enthalpy.

In case of low and medium enthalpy hydrothermal resources binary power plants are

used. They do not use the thermal fluid directly but rather transfer its heat to another

fluid with a lower boiling point. This technology is applied when fluid temperatures are

between 90°C and 150°C. High enthalpy hydrothermal resources, however, deliver

fluids with more than 150°C which can be used directly to generate electricity.

Petrothermal resources on the other hand do not contain natural fluids so that the

respective exploitation technology is called Hot-Dry-Rock technology (HDR). It

commonly requires deep wells (about 4,000m and more) in order to reach

temperatures sufficient for electricity production. Instead of extracting thermal fluids

out of the depth a stimulation medium is extruded into the rock to open up small

fractures. These make the rock permeable and turn it into an artificial aquiferous

shift. Currently the HDR-technology is still immature.

With respect to a typical plant size of each technology scientific literature as well as

interviews with specialists have formed the basis of determination. For low and

medium enthalpy hydrothermal power plants a typical size of about 3 to 5 MWe has

been set, whereas power stations exploiting high enthalpy resources provide

approximately 20 MWe capacity (see Table 6-14). By virtue of their early stage of

development the typical size of HDR-systems has had to be estimated. According to

experts nowadays a plant size of 5 to 10 MWe seems to be a reasonable figure.

Although bigger plant sizes would benefit of economies of scales, finding a willing

investor is quite challenging regarding the capital intensity, the low maturity of the

technology, and the associated risk. With increasing experience, however, the trend

to enlarge the plant size stepwise by more modules will presumably be aggravated in

the future. Therefore, we assume a gradual increase in plant size until 2030, in 2016

to 30 MW and in 2021 to 50 MW capacity respectively.

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Table 6-14: Subtechnologies of geothermal energy

Subtechnology Type of resource Capacity[MW]

geotech_1 hydrothermal high enthalpy 20geotech_2 hydrothermal medium enthalpy 3geotech_3 HDR 5 to 50

Source: EWI. Geothermal energy potential The potential for the technology classes mentioned above has been based on

available studies dealing with this problem. In case of hydrothermal resources

potential a study of Karytsas, C./Mendrinos, D. (2006) delivers detailed estimations

for Europe. The potential of geothermal electricity production using HDR-technology

was assessed on the basis of the study from Myslil et al. (2005) who estimated the

potential in depths until 5,000 meters and a minimum temperature of 130°C in the

Czech Republic. Within the European continent, high enthalpy hydrothermal

resources are sited only in Italy. In contrast petrothermal resources can be found

everywhere in Europe. Medium and low temperature hydrothermal resources are

located e.g. in the alpine Molassic basin (Germany, Switzerland), in the Rhine basin

or the Pannonian basin (Hungary, Austria, Slovakia, Romania, Slovenia).

Geothermal energy costs When determining the investment costs of geothermal electricity generation plants for

the different subtechnologies one has to distinguish between field related costs like

exploration, stimulation and drilling, power plant related costs, financing costs and

others. Thereby, drilling costs account for about 2/3 of total investment costs. Due to

their beneficial attributes high enthalpy hydrothermal resources allow for the by far

lowest electricity production costs of the geothermal resources.

However, there are great differences in the specific investment costs between almost

any of the projects realised until today. This is primarily due to varying geological

conditions at different sites which affect drilling costs as well as the flow rate. As a

consequence it has been reverted to average costs of the projects that are already

realized. Extreme outliers were removed. Regarding O&M costs the same

methodology was applied (see Table 6-15).

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Table 6-15: Investment and O&M costs of geothermal power production in Germany

SubtechnologyInvestment

costs [€2007/kW]

Annual O&M costs

[€2007/kW]geotech_1 2,000 150geotech_2 20,000 500geotech_3 15,000 320

Source: operators, geothermal institutes. With respect to future cost reductions of both investment and O&M costs, the

development status of each subtechnology was taken into consideration. Hence,

hydrothermal high enthalpy resources were conceded the lowest cost reductions

whereas HDR-technology was allowed for significant cutbacks. Moreover, due to

economies of scale effects there is a cost reduction jump in 2016 and 2021 for the

HDR-technology.

The electricity generation costs of geothermal energy in 2015 to 2030 can be seen in

Figure 6-12, Figure 6-13 and Figure 6-14.

6.2.2.7 Concentrating Solar Power Concentrating Solar Power (CSP) like parabolic through or solar tower plants play a

minor role in renewable energies so far. However, parabolic through could make an

important contribution to the electricity production from renewable energy in the short

term. Regarding important characteristics such as plant-size and flexibility in power

supply due to storage CSP is very different to all other renewable energy

technologies. Parabolic-through is designed as large-scale plant using solar radiation

for electricity generation within conventional power cycles. Though, CSP installations

require a lot of plain area and a high direct normal irradiation (DNI) thereby limiting

the potential within Europe significantly.

As parabolic through is the CSP-technology that is already commercially approved

and technically mature this technology is used in this analysis.30 As reference-

technology the plants that are currently realized and planned in Spain are chosen.

They use molten salt thermal energy storage and co-firing of gas.31 In the period from

2008 to 2015 a plant size of 50 MW is set as this is the typical plant size which is

30 Also solar tower plants could play a more important role in future. However, it is very difficult to evaluate costs as first experiences are just in process. 31 As defined in the Spanish promotion system co-firing of gas is limited to maximal 12% of the produced electricity.

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currently built.32 From 2016 onwards the plant size is assumed to increase to 200

MW. According to interviews this is considered to be the optimal size regarding cost-

effectiveness.

CSP potential Basis for the potential of parabolic through is the study of Trieb (2005). He estimates

the technical potential by requiring an annual direct normal irradiation of more than

1,800 kWh per m2. Numerous exclusion criteria (slope of terrain, kind of land cover,

hydrological and geomorphologic criteria and kind of land use) are applied. In

addition competing land uses are taken into account. Spain has by far the most

favorable conditions for the installation of CSP as it combines a high amount of

suitable areas and a sufficient high DNI.

CSP costs Investment costs of parabolic-through plants amount to about 6,000 €/kW for the

projects currently being realized in Spain (see Table 6-16). O&M-costs are based on

interviews with companies as well as the study of Geyer (2002).

Table 6-16: CSP investment and O&M costs in Spain in 2007

SubtechnologyInvestment

costs [€2007/kW]

Annual O&M costs

[€2007/kW]CSP 6,000 100

Source: EWI based on industry, Geyer (2002).

The future development of investment costs depends on the future installed global

capacity. Although progress ratios of 88% or even 86% have been established for the

development of parabolic through plants in the 1980s,33 in this analysis 93% is used.

This figure is based on expert interviews and Nitsch (2007). With every doubling of

32 This is due to the current Spanish promotion system which limits the plant size at an installed capacity of 50 MW. 33 These experiences have been made with the SEGS plants in the Californian Mojave desert. There an overall capacity of 354 MW was built in the period between 1984 and 1990.

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the aggregated installed capacity, costs drop by 7%.34 Furthermore from 2015

onwards plant size is assumed increase to 200 MW which leads to a one time 25%

cost reduction due to economies of scale.

The electricity generation costs of concentrating solar power in 2015 to 2030 can be

seen in Figure 6-12, Figure 6-13 and Figure 6-14.

CSP full load hours Full load hours are generated by conform the typical daily and seasonal structure of

electricity generation for the reference plants in Spain to all other regions. This is

done by putting the DNI of the Spanish reference plant sites into relation to all other

regions. DNI-data is taken from the study of Trieb (2005).

6.2.2.8 Small Hydro Power Small hydro power is a technology including power plants with a capacity less than

10 MW. While large hydro projects are facing increasing barriers small hydro plants

offer a higher public acceptance and have a large potential to be exploited in the

future decades. Statistics and hydro power associations35 make a differentiation

between two subclasses within the small hydro technology: < 1 MW and 1 – 10 MW.

In this study two exemplary power plant sizes are chosen (0.25 MW plants; 2.5 MW

plants) to typify this generally accepted scheme. These seem to be a good

approximation to an average plant within the subclasses.

Small Hydro Power Potential Total potential for each country was determined by evaluating different studies and

publications.36 Moreover, experts such as managing directors, scientists and

engineering offices have been consulted. Environmental restrictions have been taken

into account.

Small Hydro Power Costs Similarly, a survey among hydro power specialized engineering consultancies formed

the basis for identifying investment costs. In Germany investment costs amount to

34 IEA (2005). 35 Eurostat (2008), EurObserver (2008), ESHA (2008) etc. 36 ESHA (2008), Tichler/ Kollmann (2005), Horlacher (2003).

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5,500 €/kW in case of the smaller plant (see Table 6-17). Bigger plants benefit from

economies of scale and thus have lower specific costs. Half of the investment costs

are made up of technical costs (e.g. turbine), the other half are construction costs.

Annual O&M costs per kW constitute about 0.8 to 1% of the investment costs. As

small hydro power can be characterised as a mature technology costs are assumed

to remain constant over time.

Table 6-17: Investment and O&M costs of small hydro power

SubtechnologyInvestment

costs [€2007/kW]

Annual O&M costs

[€2007/kW]hydrotech_1 5,500 55hydrotech_2 4,500 36

Source: EWI.

In Figure 6-10 the electricity generation costs of small hydro power in 2007 can be

seen.

Figure 6-10: Electricity generation costs of small hydro power in 2007

0

50

100

150

200

250

300

350

400

Austria

Belgium

Bulgaria

Czech

Republic

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Latvia

Lithuania

Luxembourg

Poland

Portugal

Romania

Slovakia

Slovenia

Spain

Sweden UK

Norway

Switzerla

nd

€ 200

7/M

Wh

Median

Source: EWI.

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6.2.2.9 Wave Power The considered technology for wave power is the Pelamis ocean snake. It is the only

technology with realized quasi commercial deployment. One wave power converter

has a capacity of 750 kW. Recently, a plant in Portugal with an installed capacity of

2.25 MW has been realized and a 3 MW project is planned in Scotland.

Wave Power Potential The national available coast lines have been estimated by assuming that 20% of the

coast length is available for wave power technologies.37 Denmark is an exception,

since it has a relatively long coastline with high marine traffic. For Denmark,

therefore, 10% are assumed. Various converters can be connected to wave farms.

The literature assumes a possible deployment of between 20 and 36 MW/km shore

length. This study takes up a conservative stance assuming the lower end of the

range of 20 MW/km. Results have been validated by comparisons with different

national studies, especially from the UK and Ireland.

Wave Power Costs The literature review shows a high deviation of investment costs. While e.g. Carbon

Trust (2006) assumes investment costs of 6,287 €/kW, the California Energy

Commission (2008) plans with 2,169 €/kW. The currently erected plant in Portugal

has been reported by the Scottish Government (2006) with investment costs of 3,500

€/kW. EWI assumes initial investment costs of 4,000 €/kW (see Table 6-18). The

O&M costs are assumed to be 4.5% of the investment costs (Sustainable Energy

Ireland, 2006), which is within the common bandwidth for marine offshore

technologies. The deployment of this technology requires a specific expert skill set.

Therefore it is assumed that no national cost differences exist.

Table 6-18: Investment and O&M costs of wave energy

SubtechnologyInvestment

costs [€2007/kW]

Annual O&M costs

[€2007/kW]wave 4,000 180

Source: EWI. 37 California Energy Commission (2008).

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The technology is too immature to use a learning curve approach. Learning curves

tend to overestimate the cost reduction when only a few projects have been

realized.38 It requires a certain deployment level to predict cost reductions more

accurately. The electricity generation costs of wave energy in 2015 to 2030 can be

seen in Figure 6-12, Figure 6-13 and Figure 6-14.

Wave Power Full Load Hours National load hours are calculated by utilizing a wave power matrix, which defines an

output based on wave height and frequency of waves. Technology improvements

can be expected due to the maturity state of the technology. As an assumption, the

efficiency is improved by one percent point every five years. To take the seasonal

variability into account, the annual utilization has been subdivided. Due to the lack of

widely available data, the Atlas of UK Marine Renewable Energy Resources39

provides data that serve as proxy for the relative differentiation between the seasons.

6.2.2.10 Tidal Power The technology, which currently shows the highest maturity, is the Seagen

technology. Each tidal power converter has a capacity of 1.2 MW. A 300 kW

Prototype has been installed at Lynmouth, Devon and a full-scale prototype is

currently under construction in Strangford Lough, UK.

Tidal Power Potential The potential has been estimated on the basis of literature research. In some cases,

such as the United Kingdom with a potential of 2.8 GW40, national studies exist.

When no data were available, assumptions have been made on the basis of

comparisons with countries, for which data were available.

Tidal Power Costs Investments costs in the literature have relatively high deviations. The range starts at

1,700 to 3,500 €/kW41 and ends at 8,949 €/kW42. Carbon Trust (2006) assumes a

cost range of 2,047 – 4,386 €/kW for tidal farms with several MW installed capacity.

38 Kahouli-Brahmi (2008). 39 BERR (2008). 40 Carbon Trust (2006). 41 Sustainable Energy Ireland (2006). 42 Sustainable Development Commission (2007).

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EWI assumes initial investment costs of 5,000 €/kW (see Table 6-19). The O&M

costs are assumed to be 4.5% of the investment costs (Sustainable Energy Ireland,

2006), which is within the common bandwidth for marine offshore technologies.

The underlying assumptions are the same as for the Pelamis wave power

technology. The deployment of this technology requires a specific expert skill set.

Therefore it is assumed that no national cost differences exist. Moreover, the

technology is too immature to use a learning curve approach.

Table 6-19: Investment and O&M costs of tidal energy

SubtechnologyInvestment

costs [€2007/kW]

Annual O&M costs

[€2007/kW]tidal 5,000 225

Source: EWI. The electricity generation costs of wave energy in 2015 to 2030 can be seen in

Figure 6-12, Figure 6-13 and Figure 6-14.

Tidal Power Full Load hours The literature provides a high bandwidth of possible capacity utilizations, which vary

by far more than 100%. Technology improvements can be expected due to the

maturity state of the technology. As an assumption, the efficiency is improved by one

percent point every five years. The daily infeed structure has been implemented

according to the tidal frequency.

6.2.3 Overview of resulting RES-E potentials and RES-E generation costs This section provides an overview of the results of the potential and cost assessment

described in the previous section. First, the resulting RES-E potential for all EU27++

countries and for each considered technology is shown. Second, the bandwidths of

RES-E costs for all technologies in 2015, 2020 and 2030 are presented.

In Figure 6-11 the renewable energy potential within the EU27++ countries can be

observed. For conceivability and comparability reasons the values are expressed in

TWh, although the terms of measurement has been mostly different, e.g. in case of

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wind onshore the potential area in km² has been determined. To convert the original

unit into TWh, it is assumed that only the best available technologies of each

technology class (state-of-the art in 2020) utilize the potential given their properties

such as full load hours and space requirements.

Countries such as France, Germany, the UK and Spain offer a high potential for

electricity generation by RES. Whereas France and Germany have a similar mix, in

the UK potential can be ascribed mostly to wind power. Here, countries located at the

coast (Denmark, the Netherlands) also have favorable conditions for the

development of offshore wind technology as they benefit from huge areas which are

well accessible due to low water depths.

Figure 6-11: Realisable RES-E potential in EU27++ countries

0 100 200 300 400 500 600

SwitzerlandNorway

UKSweden

SpainSloveniaSlovakia

Rom aniaPortugal

PolandNetherland

MaltaLuxem b.

LithuaniaLatvia

ItalyIreland

HungaryGreece

Germ anyFranceFinlandEstonia

Denm arkCzech Rep.

CyprusBulgariaBelgium

Austria

TWh

wind (onshore)wind (offshore)biomassphotovoltaicsgeothermal energyconcentrating solar powerwave energytidal energysmall hydro power

Source: EWI.

Spain exhibits a relatively high potential for concentrating solar power. While other

southern countries as well (Greece, Italy, Cyprus, and Malta) offer a high direct

normal irradiation they do not bring along open areas at the same time but are

characterised rather by craggy and hilly areas. The geothermal Hot-Dry-Rock

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technology also contributes a substantial share to the total renewable energy

potential as it can theoretically be applied everywhere. Likewise photovoltaics and

biomass can be applied in many countries. However, small countries like

Luxembourg and Malta hardly have any potential (about 1 TWh). This is in principal

caused by their small size. The tidal and wave potential has been identified mainly at

the Atlantic coast, where oceanic activities are rough and tidal performances are

vast.

Figure 6-12 shows the electricity generation cost ranges of all technology classes of

the EU27++ countries in 2015. Thereby, the median cutting the distribution in half

can be interpreted as the “typical” electricity generation cost of the respective

technology class. While wind on- and offshore are on average the most economic

technologies photovoltaics is commonly quite expensive.

Figure 6-12: Electricity generation costs by RES in EU27++ countries in 201543

0

100

200

300

400

500

600

biomas

s

geoth

ermal

small

-scale

hydro

photo

volta

ics

solar

therm

altid

alwav

e

wind_o

ffsho

re

wind_o

nsho

re

€ 200

7/MW

h

Median

Source: EWI.

43 Biomass only stand-alone.

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In Figure 6-13 and Figure 6-14 the electricity generation costs in 2020 and 2030

respectively can be seen.

Figure 6-13: Electricity generation costs by RES in EU27++ countries in 2020

0

100

200

300

400

500

600

biomass

geothermal

small h

ydro

photovolta

ics

solarth

ermal

tidal

wave

wind_offsho

re

wind_onshore

€ 200

7/MW

h

Median

Source: EWI.

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Figure 6-14: Electricity generation costs by RES in EU27++ countries in 2030

0

100

200

300

400

500

600

biomass

geotherm

al

small h

ydro

photovo

ltaics

solarth

ermal tid

alwav

e

wind_off

shore

wind_on

shore

€ 200

7/MW

h

Median

Source: EWI

6.3 RES-E Targets

As explained in the motivation chapter, the individual MS only received targets for the

overall renewable share on the final energy demand. It is in the responsibility of the

MS to publish targets for the particular sector in their National Action Plan. Since

these action plans are not available yet, RES-E targets have to be calculated for this

study. This has been done by the following methodology: The 2005 RES-E share has

been increased by a flatrate share, which is the same for all MS and the remaining

amount has been assigned by a GDP distribution.

Figure 6-15 shows the RES-E targets of all MS. While the 2010 targets have been

taken from the 2001 renewables directive, the 2020 and 2030 targets have been

calculated. A sensitivity case with a GDP per capita assignment is additionally

discussed in the results chapter.

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Figure 6-15: RES-E Targets

Country 2010 2020 2030Austria 78% 82% 93%Belgium 6% 22% 33%Bulgaria 11% 23% 29%Cyprus 6% 18% 29%Czech Republic 8% 17% 25%Denmark 29% 58% 75%Estonia 5% 14% 21%Finland 32% 41% 50%France 21% 32% 43%Germany 13% 30% 42%United Kingdom 10% 29% 43%Greece 20% 29% 40%Hungary 4% 20% 29%Ireland 13% 40% 54%Italy 25% 36% 48%Latvia 49% 58% 66%Lithuania 7% 18% 26%Luxembourg 6% 27% 40%Malta 5% 17% 26%Netherlands 9% 31% 44%Norway 100% 105% 110%Poland 8% 17% 25%Portugal 39% 40% 50%Romania 33% 46% 53%Slovakia 31% 29% 36%Slovenia 34% 41% 49%Spain 29% 35% 46%Sweden 60% 65% 74%Switzerland 63% 63% 66%

Source: EWI.

As an overall target for the calculation, the sector distribution of the EC roadmap

served as a guideline, which calculated an approximate RES-E share of 34 % for

2020. If a country has already defined a national RES-E target, it has been taken

instead. As an overall target for 2030, 45 % has been assumed and broken down to

MS level through the same methodology. Note that in the case of Norway the RES-E

share exceeds 100% implying that Norway is a net-exporter of electricity generated

from renewable energy sources.

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PART III: Results and Discussion The third part of this report presents and discusses quantitative scenario results.

Chapter 7 describes in a first step the results of the “Harmonized Quota System”

(HQS) scenario with regard to the development in the RES-E submarket and its

effects on the conventional power system. This scenario is in the focus of the

discussion since it reaches the RES-E targets due to the quantity-based setting. This

order emphasizes that this study includes comparative scenario study and no

forecast. Scenarios are extrapolations under given sets of assumptions. They do not

reflect most likely developments. Especially, our BAU scenario freezes current

national RES-E promotion laws. It does not include likely, but in detail unforeseeable

adaptations of these laws.

Chapter 8 compares HQS with the Business-as-usual (BAU) scenario which is

dominated by technology and region specific feed-in tariffs. HQS and BAU are the

scenarios which differ the most. Chapter 9 presents a hybrid case (Cluster scenario).

Chapter 10 draws conclusions.

Since the European targets are only defined until 2020, the detailed analysis focuses

on this time frame, the results for 2030 serve as further outlook.

It is important to emphasize that all scenario results depend on scenario-specific

policy assumptions, and on the set of assumptions outlined in Part II of the study.

Therefore the scenarios should not be confused with prognoses.

7 The Harmonized Quota System (HQS) Scenario

This chapter discusses the effects that result in the renewable and the conventional

power market if RES-E become deployed in a Europe-wide cost optimizing process

within the RES-E market. The costs that occur in the conventional power market,

especially in the grid, are not considered in this study.

First, the renewable sub-market will be discussed in greater detail (Section 7.1).

Second, the effects on the conventional power market and the interdependencies

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between the markets are discussed (Section 7.2). mmmmmmmmmmmmmmmm m m

m m

7.1 Developments in the RES-E submarket

In this section, the HQS scenario is discussed regarding RES-E generation and

capacity development, investment costs, and the distribution of RES-E deployment

throughout Europe. The latter results in potential cost reductions compared with

national target achievement and the corresponding trade streams of green

certificates (TGC).

RES-E Generation and Capacity Investments in HQS

The growth of the RES-E market is defined by the RES-E quota target. The cost-

minimal RES-E technology mix is based on the resource quality throughout all

European regions. The resulting total RES-E development is illustrated in Figure 7-1.

Figure 7-1: RES-E Generation EU27++ in Harmonized Quota System

-500

0

500

1,000

1,500

2,000

2007 2015 2020 2030

gene

ratio

n in

TW

h

wave

tidal

geothermal

concentrating solar

photovoltaics

biomass

wind_offshore

wind_onshore

small-scale hydro

large hydro

Source: EWI.

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The RES-E growth is mainly based on wind onshore and offshore as well as on

biomass. In the longer run, the generation from solarthermal, geothermal and

photovoltaics also plays a role. The potentials of large- and small-scale hydro power

are already to a great degree utilized and show therefore only a small growth.

The same development can be seen in the capacity deployment overview in Figure

7-2. Mainly wind onshore and offshore becomes deployed to a great extent. One can

see that the utilization of wind onshore is lower than of wind offshore. In the biomass

sector, existing capacities become replaced by capacities which are utilized to a

greater degree and therefore show a higher generation. The photovoltaics capacities

become mainly deployed after 2020 and are relatively prominent due to the

comparatively low utilization hours of this technology. The concentrating solar

capacities on the other hand show a higher utilization.

Figure 7-2: RES-E capacities in HQS

0

100

200

300

400

500

600

700

2007 2015 2020 2030year

inst

alle

d ca

paci

ty in

GW

wave

tidal

geothermal

concentratingsolarphotovoltaics

biomass

wind_offshore

wind_onshore

small-scale hydro

large hydro

Source: EWI.

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In order to construct the capacities which are necessary to reach the 2020 RES-E

target, cumulative investments of 313 billion €200744 are necessary in the least-cost

deployment assumption of the HQS. Figure 7-3 shows that the lions´ share of 42% of

the total investment costs is spent for wind onshore construction, followed by

biomass with 24% and wind offshore with 21%. The remaining 13 % are spent for the

less mature technologies, with a 6% share of concentrating solar as the largest share

of the minor technologies.

Figure 7-3: Cumulative RES-E Investment Costs 2008-2020 in HQS (EU27++)

Wind Onshore42%

Biomass24%

Geothermal2%

Wave0%

Wind Offshore21%

Hydro2%

PV3%

Solar6%

Tidal0%

Total: 313 Billion €2007

Source: EWI.

The distribution of RES-E throughout Europe is based on the generation costs of the

renewable technologies as well as on national marginal generation costs in the

conventional power system according to the model DIME.45 Figure 7-4 provides an

overview of the regional and temporal development of the marginal generation costs

in the conventional power market.

44 Actual cash value with the base year 2007. 45 As marginal generation costs resulting from DIME also include capacity payments, they can be interpreted as long-run marginal costs.

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Figure 7-4: Development of Marginal Generation Costs in the Conventional Power Market - HQS scenario

-

10

20

30

40

50

60

70

Austria

Belgium

Bulgaria

Czech

Rep

ublic

Denmark

-Eas

t

Denmark

-Wes

t

Estonia

Finland

France

German

y

Greece

Hungary

Irelan

dIta

lyLatv

ia

Lithuan

ia

Luxembourg

Netherl

ands

Norway

Poland

Portugal

Romania

Slovakia

Slovenia

Spain

Sweden

Switzerl

and

United K

ingdom

Mar

gina

l Gen

erat

ion

Cos

ts (€

/MW

h)

2015 2020 2030

Source: EWI.

Generally, the development of marginal costs is influenced by the following opposing

effects: First, an increasing RES-E in-feed lowers marginal generation costs as RES-

E marginal costs are close to zero and result therefore in a lower-cost marginal

technology. Secondly, the fuel costs of conventional power sources are assumed to

increase until 2030 (see chapter 6.1), causing the costs of conventional power

generation to rise, even if the share of conventional power generation decreases.

Thirdly, as will be discussed in the next section, the structure of the conventional

power generation changes, which can lead into both directions. Finally, as a result of

cross-border trading, marginal generation costs in each country are also influenced

by those in their neighbor countries.

Regional Distribution of RES-E Deployment The marginal generation costs in the conventional power market together with the

RES-E generation costs by region are the basis for the regional and temporal

deployment of RES-E. The regional distribution of the different technologies in 2020

is displayed in Figure 7-5.

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Figure 7-5: Regional RES-E generation mix in HQS (2020)

Source: EWI.

It is striking that most countries deploy wind power to a certain degree and that solar

based technologies become deployed in some southern European countries.

Additionally, it can be seen by the colour coding of the country area in Figure 7-5

which countries reach their RES-E target and which need to import TGC from

countries that overshoot their targets due to their relative favorable potential

compared to their national target. The national targets do not play a role in the

optimization process. The quantity target is set Europe-wide. Whether a country

reaches its target is analyzed ex-post. To which degree countries import and export

TGC is quantified later.

Since wind power is the dominant RES-E technology, Figure 7-6 provides an

overview on its development by countries. The concentration of wind power

deployment is mainly based on the quality of the resource potential. It can be seen

that the UK and Germany are dominant countries in 2020, followed by France,

Poland, Spain, Denmark and the Netherlands. In 2030, wind offshore dominates the

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deployment in the UK and the Netherlands. Overall, the UK shows by far the greatest

generation from wind power in 2030, followed by Germany, France, the Netherlands

and Poland.

Figure 7-6: Wind Generation by Country in 2007, 2020 and 2030 2007 [TWh]Wind total Onshore Offshore Wind total Onshore Offshore Wind total

Austria 2.0 4.4 0.0 4.4 5.4 0.0 5.4Belgium 0.5 8.6 8.1 16.8 9.6 8.3 17.9Bulgaria 0.0 0.3 0.0 0.3 0.3 0.0 0.3Cyprus 0.0 0.3 0.0 0.3 0.3 0.0 0.3Czech Republic 0.1 19.3 0.0 19.3 19.9 0.0 19.9Denmark 7.2 13.4 26.7 40.2 12.4 31.0 43.4Estonia 0.1 8.5 0.0 8.5 9.8 0.0 9.8Finland 0.2 7.3 0.0 7.3 7.6 0.0 7.6France 4.1 42.4 15.6 58.0 62.5 36.9 99.5Germany 39.7 48.5 39.0 87.5 68.7 49.2 117.8Greece 1.8 6.7 0.0 6.7 8.0 0.0 8.0Hungary 0.1 8.2 0.0 8.2 8.4 0.0 8.4Ireland 2.0 24.9 0.0 24.9 29.4 0.0 29.4Italia 4.0 6.4 0.0 6.4 8.2 0.0 8.2Latvia 0.1 2.8 0.0 2.8 3.1 0.0 3.1Lithuania 0.1 1.5 0.0 1.5 1.7 0.0 1.7Luxembourg 0.1 1.0 0.0 1.0 1.1 0.0 1.1Malta 0.0 0.0 0.0 0.0 0.0 0.0 0.0Netherlands 3.4 11.3 25.5 36.8 13.3 78.2 91.5Norway 0.9 6.7 8.0 14.6 7.2 8.1 15.3Poland 0.5 47.9 0.0 47.9 82.0 0.0 82.0Portugal 4.0 9.3 0.0 9.3 10.6 3.2 13.8Romania 0.0 3.1 0.0 3.1 3.1 0.0 3.1Slovakia 0.0 3.4 0.0 3.4 3.4 0.0 3.4Slovenia 0.0 0.3 0.0 0.3 0.3 0.0 0.3Spain 27.5 46.9 0.0 46.9 56.9 0.0 56.9Sweden 1.4 10.6 0.3 11.0 13.1 0.0 13.1Switzerland 0.0 0.1 0.0 0.1 0.1 0.0 0.1United Kingdom 5.3 69.5 37.8 107.3 106.7 127.5 234.3

2020 [TWh] 2030 [TWh]

Source: EWI.

Comparing this development with the generation in 2007, it can be seen that mainly

the UK has not utilized the wind power potential yet. However, most countries with

sufficient potential increase the wind power generation substantially in the HQS

scenario. The countries, which have already deployed considerable amounts of wind

power until 2007, especially Germany, Spain and Denmark, show a significantly

smaller increase until 2020.

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Potential Harmonization Gains46 One advantage of modeling a technology-neutral harmonized scenario is the ability

to compare it to a technology-neutral national scenario in order to quantify gains from

harmonization. An intuition of the considerable potential harmonization gains from

changing from a region-specific to a harmonized support system has been given in

the introductory chapter through Figure 2-4 and Figure 2-5. It has been shown that

current RES-E deployment is based solely on the fragmented national support

systems and not on the resource potential qualities of the different European regions.

We have seen that the German PV deployment is by far the greatest in the EU (with

2,811 GW in 2007). The generation costs could be much lower, if the capacity had

been installed e.g. in Spain. Such regional effects alone cause significant

harmonization gains.

Regarding harmonization gains, only the cost difference arising from a switch

between national and harmonized support is of interest. Therefore the auxiliary

scenario National Quota System (NQS) has been designed by the requirement to

fulfill the national targets within the national borders, but compared to the BAU

scenario, not with the current support system, but with the efficient deployment of a

(technology-neutral) national quota system. As explained in section 6.3, the national

RES-E targets are not yet officially set. The exact level of potential harmonization

gains is influenced by the RES distribution between the sectors electricity, heat and

transport, each individual MS is going to define in its National Action Plan. To take

into account the influence of different target settings, the harmonization gains have

been both calculated with the RES-E target setting described in section 6.3, and with

a second approach, based on a GDP per capita weighted part instead of a GDP

weighted part. The resulting RES-E targets for 2020 can be seen in Table 7-1. For

most countries the targets hardly differ between the two approaches. The most

significant differences arise for Sweden and Luxembourg due to their high GDP per

capita.

46 Gains from trade usually increase with system size. This study analysis an EU-wide harmonization under the consideration of Norway and Switzerland. In case additional countries joined the trade system, e.g. countries from south-east Europe or northern African countries, harmonization gains could increase.

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Table 7-1: RES-E targets 2020 weighted by GDP and GDP/capita factor GDP GDP/capita

Country weighted weighted2020 2020

Austria 82% 83%Belgium 22% 24%Bulgaria 23% 22%Cyprus 18% 17%Czech Republic 17% 18%Denmark 58% 54%Estonia 14% 14%Finland 41% 49%France 32% 33%Germany 30% 30%United Kingdom 29% 26%Greece 29% 29%Hungary 20% 18%Ireland 40% 40%Italy 36% 35%Latvia 58% 57%Lithuania 18% 16%Luxembourg 27% 40%Malta 17% 15%Netherlands 31% 30%Norway 105% 105%Poland 17% 15%Portugal 40% 39%Romania 46% 44%Slovakia 29% 28%Slovenia 41% 42%Spain 35% 36%Sweden 65% 72%Switzerland 63% 63%

Source: EWI.

A comparison of the least cost RES-E deployment on national level (NQS) with the

least cost Europe-wide deployment (HQS) allows calculating harmonization gains, as

thereby the effect of harmonization is purely based on the quality of the regions, the

national potential and the target (see Figure 7-7). In a subsequent step, the RES-E

values need to be transferred between the countries according to their national

targets. From a modeling point of view this is purely an ex-post distribution and has

no effects on the optimization results.

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Figure 7-7: Calculation of Harmonization Gains

Harmonized QuotaSystem:

• quantity based support• technology neutral support

• harmonized support

National QuotaSystem:

• quantity based support• technology neutral support

• national support

Harmonizationgains

Source: EWI. For the interpretation of the harmonization gains, a few assumptions are crucial to

mention. First, a penalty price has been introduced in order to avoid unrealistically

high support costs. As upper ceiling of the RES-E certificate price, 500 € has been

assumed to be high enough a price in order to allow both enough utilization of

potential and to limit overall costs. Without such an upper barrier, the cost

comparison would have been too much influenced by those countries, which do not

have the required potential to meet the targets. Since the targets have been set

based on GDP respectively on GDP per capita rather than on national resource

potential, this approach would have generated misleading results.

Since the costs comparison (investment, O&M, fuel costs and heat remuneration) is

based on the comparison of two least cost solutions (HQS vs. NQS), there is an

additional effect. Above, the harmonization gains have been explained mainly

through the cheaper resources, e.g. due to sunnier sites within one technology. In

some countries, the harmonization leads also to the effect that the marginal

technology, which is necessary to fulfill the national targets in the NQS would not

have been built in the harmonized scenario. Therefore, in addition to a higher quality

regional resource, the effect of a switch to a cheaper technology is inherent. It is

important at this point to understand, that within the harmonization gains, there is

already an implicit switch in the technology mix. The harmonization gains under the

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GDP weighted target setting accumulate to 118 bill. €2007 between 2008 and 202047,

which means a cost reduction compared to the NQS scenario of almost one fifth. In

the case of the GDP per capita weighted target setting, this number rises by almost

one billion euro.

Harmonization gains arise because in HQS national targets do not have to be fulfilled

by each country on its own. Still, an ex-post redistribution is necessary to assure that

every country bears costs according to their national targets. This redistribution is

based on TGC trade, which is a pure trade of the green certificate value without any

physical transfer. Since the RES-E targets have been partially set either on the basis

of the national GDP or the national GDP per capita, it is an inherent effect that

countries with a relatively low GDP become net exporters and countries with a high

GDP tend to be net importers due to their relatively higher ability to afford the RES-E

support. Of course, besides the target setting, a dominant role plays the national

RES-E potential. Also a low GDP country with a corresponding low target could have

low RES-E potentials and would therefore depend on TGC imports. Gains from trade

arise because every country can either utilize its resource base or has the chance to

import TGC. Consequently, net importing countries of TGC gain from the possibility

to import TGC instead using their less favorable resources, while net exporting

countries gain by receiving remuneration for utilizing their favorable locations. Figure

7-8 and Figure 7-9 provide an overview of the TGC trade streams under the afore-

mentioned target settings. Net exporting countries of TGC have been marked green

(positive values), while the red color coding indicates, that a country is a net importer

of TGC (negative values). In both figures, the countries have been grouped into the

EU15 and the EU12 countries (plus Norway and Switzerland, which form a third

group), in order to illustrate the effects of the target distribution based on national

GDP respectively GDP per capita: In sum, the EU15 imports in 2020 TGCs with a

total value of 3,917 Mill.€2007 .under the GDP weighted target setting and 4,603

Mill.€2007 .under the GDP per capita approach reflecting the higher GDP per capita in

the Western European MS. Generally, under both methodologies the netexporting

and netimporting countries remain the same and differ only regarding the absolute

value.

47 Net Present Value with base year 2007.

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Figure 7-8: TGC Trade Streams (2020); GDP weighted target-setting

Germany -1,603

Italy -2,325

United Kingdom 1,095

Luxembourg -23

Austria -807

Belgium -3

Denmark 1,305

Finland -639

France -1,606

Netherlands 453

Sweden -1,324

Spain 387

Greece 19

Ireland 929

Portugal 222

EU15

Switzerland -120Norway -125

EU12

Hungary 841Poland 2,268

Lithuania 325

Latvia 66

Estonia 396

Bulgaria 76

Slovakia -27

Romania -240

Malta -10

Czech Republic 523

Cyprus 74

Slovenia -129

EU- 15 has to import TGCs

(Total 3,917 Mill. €2007)

Germany -1,603

Italy -2,325

United Kingdom 1,095

Luxembourg -23

Austria -807

Belgium -3

Denmark 1,305

Finland -639

France -1,606

Netherlands 453

Sweden -1,324

Spain 387

Greece 19

Ireland 929

Portugal 222

EU15

Switzerland -120Norway -125

EU12

Hungary 841Poland 2,268

Lithuania 325

Latvia 66

Estonia 396

Bulgaria 76

Slovakia -27

Romania -240

Malta -10

Czech Republic 523

Cyprus 74

Slovenia -129

EU- 15 has to import TGCs

(Total 3,917 Mill. €2007)

Source: EWI.

Figure 7-9: TGC Trade Streams (2020); GDP per capita weighted target-setting

Germany -1,603

Italy -2,007

United Kingdom 1,640

Luxembourg -76

Austria -864

Belgium -147

Denmark 1,384

Finland -1,037

France -2,024

Netherlands 490

Sweden -1,931

Spain 355

Greece 19

Ireland 929

Portugal 268

EU15

Switzerland -120Norway -125

EU12

Hungary 904Poland 2,456

Lithuania 340

Latvia 75

Estonia 395

Bulgaria 92

Slovakia -19

Romania -161

Malta -8

Czech Republic 480

Cyprus 77

Slovenia -135

EU- 15 has to import TGCs

(Total 4,603 Mill. €2007)

Germany -1,603

Italy -2,007

United Kingdom 1,640

Luxembourg -76

Austria -864

Belgium -147

Denmark 1,384

Finland -1,037

France -2,024

Netherlands 490

Sweden -1,931

Spain 355

Greece 19

Ireland 929

Portugal 268

EU15

Switzerland -120Norway -125

EU12

Hungary 904Poland 2,456

Lithuania 340

Latvia 75

Estonia 395

Bulgaria 92

Slovakia -19

Romania -161

Malta -8

Czech Republic 480

Cyprus 77

Slovenia -135

EU- 15 has to import TGCs

(Total 4,603 Mill. €2007)

Source: EWI.

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7.2 Effects on the conventional Power Market in Case of Target Fulfillment

This chapter explains the effects of the RES-E increase in the HQS scenario on the

conventional power market. Again we emphasize that the results are scenario

results, conditioned by numerous assumptions and a rigorous optimization calculus;

they should not be confused with a prognosis.

We discuss the generation mix, capacity effects, and the utilization of the

conventional power plants in the HQS scenario.

Total Generation Mix An overview of the total generation mix within the EU27++ is displayed in Figure

7-10. According to the quantity targets, the RES-E share rises significantly at the

expense of mainly coal- and natural gas-based generation.

Figure 7-10: Generation EU27++ in Harmonized Quota System

-500

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2007 2015 2020 2030

gene

ratio

n in

TW

h

windreductionpumped storagenetimportotherwavetidalgeothermalconcentrating solarphotovoltaicsbiomasswind_offshorewind_onshoresmall-scale hydrolarge hydrogasoilhardcoalnuclearlignite

Source: EWI.

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It can be seen from Figure 7-10 that the main share of additional RES-E generation

stems from onshore wind power followed by offshore wind power and biomass. Large

scale hydro power remains one of the most important RES-E technologies. It is

striking that lignite and nuclear remain the most important conventional energy

sources on the European scale, while especially generation from hardcoal becomes

significantly reduced and gas-based generation remains at approximately the same

level after a significant drop at the beginning of the modeling period.

The increasing RES-E share leads by definition to a decreasing total share of energy

generated by non-renewable energy sources. Due to the higher RES-E in-feed,

hardcoal and natural gas based electricity shrink until 2030. In contrast, the shares of

lignite and nuclear remain relatively constant and the RES-E generation satisfies the

additional demand increase.

The change of the generation mix is a direct result of the RES-E increase. Before the

effects on the conventional capacity become analyzed, some fundamental

interdependencies between RES-E infeed and conventional system requirements are

discussed.

Effects on Conventional Generation Capacities48 Security of electricity supply includes a short run and a long run aspect. In the short

run, security is understood as the readiness of existing generation capacity to

respond when needed to meet the actual load. Balancing power and intraday

markets are supposed to close the gap between supply and demand in a real-time

timeframe. The deviations from the day-ahead spot-market plant dispatch can be

triggered through unplanned power plant shutdowns, forecast errors of load or infeed

of intermitting RES-E technologies (such as e.g. wind power or pv).

In order to provide the required system security level, it is crucial to have sufficient

capacity available for either increasing the power supply or reducing it by ramping

down running power plants. Alternative options include adaptations on the demand

side (DSM) or storage dispatch. The required amount of reserve capacity is usually a

responsibility of the grid operators. However, the reserve can only be available if it is

already installed. This leads us to the long run aspect of security of supply, which is

48 Conventional capacity is defined in this study as generating capacity which is not part of RES-E support schemes and therefore a part the competitive power market.

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usually called system adequacy. An adequate system has sufficient installed

capacity, grid as well as generation, to meet demand (for a more detailed discussion

see e.g. Battle and Pérez-Arriaga, 2009).

One fundamental attribute of some RES-E technologies is their intermitting infeed

structure since they are dependent on natural local circumstances, such as wind, rain

or sun irradiation. This means, it cannot be guaranteed that the RES-E infeed is

present in high load hours, which lowers the positive effects on system adequacy.

By now, electricity from onshore wind power plants is one of the cheapest RES-E

options. One particular attribute of wind power is that it is strongly dependent on the

natural circumstances in form of wind. Therefore, the RES-E generation is not

guaranteed in the hours of peak demand. On the other hand, through regional

distribution, it is unlikely that there is no wind simultaneously in all regions. Thus, a

certain amount of wind capacity can be accounted as guaranteed at a certain

security level. This secured capacity, which is called capacity credit, is able to

substitute a certain amount of conventional capacity in the power plant mix.

Compared to the RES-E infeed however, the share of secure capacity is relatively

low. Within the Dena (2005) study, EWI calculated that the installed wind capacity of

14.5 MW in 2003 in Germany had a capacity credit of between 7 and 9%, meaning

that between 1.0 and 1.3 GW conventional capacity can become substituted. It is

important to note that an increasing penetration of wind power reduces its relative

capacity credit. The above mentioned study also calculated that the planned 35.9

GW wind capacity in 2015 would have a capacity credit of only 5 to 6%. Figure 7-11

illustrates, which effects this attribute has on the conventional power plant mix.

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Figure 7-11: RES-E induced shift in the conventional power market

Available conventional capacity

Capacity/Load(GW)

Utilization time (h/a)

Annual costs

(€/kWa)Peakload-

plant

Baseload-plant

Medium load-plant

8760

Peakload-plant

Baseload-plant

Medium load-plant

8760without RES-E with RES-E

Utilization time (h/a)

Shift of the annual load duration curve caused

by RES-E

Capacity-Credit

Available conventional capacity

Capacity/Load(GW)

Utilization time (h/a)

Annual costs

(€/kWa)Peakload-

plant

Baseload-plant

Medium load-plant

8760

Peakload-plant

Baseload-plant

Medium load-plant

8760without RES-E with RES-E

Utilization time (h/a)

Shift of the annual load duration curve caused

by RES-E

Capacity-Credit

Source: Adapted from Wissen and Nicolosi (2008), see also Nabe (2006).

The upper right graph shows marginal cost curves with annuity capacity costs as

starting point at the ordinate. It can be seen, that base load plants have relatively

high investment cots and low variable costs (especially fuel costs). Peak load plants

on the other hand have low investment costs and relatively high variable costs. The

abscissa shows the annual utilization time at which the plant types are efficient. Base

load plants are economically viable when a high utilization time can be reached, peak

load plants are only the efficient choice when the utilization remains at a low level

(see e.g. Stoft, 2002). In the lower right graph, two annual duration load curves are

depicted. The annual load hours are arranged in descending order. The highest load

hour (peak demand) is arranged at the left end and the hour with the lowest demand

at the right end. The upper curve is the total load and the lower curve is the residual

load curve. The latter is the load curve less the electricity production which is not part

of the conventional power market or has no variable costs, such as prioritized RES-E

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feed-in or heat-controlled cogeneration of electricity. In other words, part of the load

is already covered by market-exogenous generation. The increasing RES-E infeed

leads therefore to a steeper slope of the residual load curve. The resulting shift of the

shares of the different power plant types can be seen in the lower left graph. The

result of high RES-E infeed with a relatively low capacity credit is an increase in peak

load capacity and a decrease in base load capacity.

Since the RES-E infeed covers already a certain share of demand, the utilization time

of the total conventional power market will be reduced. This effect will apply

especially in hours with low load and high RES-E infeed, when large parts of the

conventional capacity need to ramp down. The shift of load hours can be seen in

Figure 7-12.The model results of the total EU27++ generation capacities have been

evaluated according to their utilization time. It can be seen, as already qualitative

explained above, that the conventional capacity shift towards generation with less

load hours as RES-E deployment increases.

Figure 7-12: Shift of load hours in EU27++ (HQS scenario)

2010 2020 2030

load

hou

r sha

res

<2000 h

2000-6500 h

>6500 h

Source: EWI.

The reduction in conventional load hours lies in the fundamental attributes of

intermitting RES-E capacities. The overall energy infeed becomes quite significant in

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the HQS scenario, since the political target becomes fulfilled. The secured capacity

(capacity credit) primarily of wind power plants is quite small. Sufficient back-up

capacity needs to be installed in order to secure the electricity supply (e.g. biomass

can also serve as secured capacity to a large extent). Since the conventional

capacity reductions due to RES-E increase are not very significant, the installed

conventional capacity fleet is utilized at reduced load hours. This leads to the above

explained shift in the distribution of load hours. Figure 7-13 shows the overall

installed capacity mix in the EU27++, which is required to produce sufficient RES-E

as well as guarantee the required supply security.

Figure 7-13: Total installed capacity in EU27++

0

200

400

600

800

1,000

2007 2015 2020 2030

Cap

acity

in G

W

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Gro

ss E

lect

ricity

Dem

and

in G

Wh

wavetidalgeothermalphotovoltaicsconcentrating solarbiomasswind_offshorewind_onshoresmall-scale hydrolarge hydrooilgashardcoalnuclearlignitegross electricity demand

Source: EWI.

It can be seen in Figure 7-13 that conventional capacity becomes hardly substituted

by the RES-E capacity increase. The only fuel type, which shows an effect (that is

also influenced by the CO2 policy) is hardcoal. The increase in volatility, which leads

to the reduction of load hours for the conventional power market, favors clearly

investments in natural gas-fired technologies. The relatively low investment costs

lead to lower load hour requirements.

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The main implication in this context is the continuing demand for conventional

generation capacity, since older power plants which phase-out need to become

substituted, and intermitting generation capacities contribute only little to secured

capacity. Apart from their limited contribution to secured capacity, intermitting RES-E

capacities become added on top of the conventional system.

Flexibility Requirements of the Power System In order to integrate the RES-E generation modeled by LORELEI into the DIME

model of the competitive power market, certain flexibilities need to be integrated to

enable a feasible solution. It is important to mention that the flexibility requirements in

the model outcomes underestimate the actual integration challenges due to the

copper plate assumption, which ignores national grid situations and due to the

reduction of temporal resolution through day types. But even with these remarks

integration challenges become visible. The first flexibility, which needed to be

integrated is a procedure which is also undertaken in reality in case of system

stability issues. In e.g. Germany, the TSOs are allowed to shut down wind infeed, if

system stability is in danger. This is the case if wind power infeed exceeds the load

to a degree that even under consideration of cross border exchange, power cannot

be integrated into the system. This action is named “wind reduction” in the model and

can be seen exemplary in Figure 7-14 for UK.

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Figure 7-14: Windreduction as an example in UK under the HQS49

-50

0

50

100

150

200

250

300

350

400

450

2007 2015 2020 2030

year

gene

ratio

n in

TW

hwindreductionpumped storagenetimportotherwavetidalgeothermalconcentrating solarphotovoltaicsbiomasswind_offshorewind_onshoresmall-scale hydrolarge hydrogasoilhardcoalnuclearlignite

Source: EWI. In 2030, UK in the HQS scenario needs to shut down wind power plants in order to

maintain system stability. This can be seen as the mint colored area underneath the

abscissa in 2030. Since this theoretical generation is included in the generation mix,

total generation exceeds demand in this year. This flexibility becomes increasingly

important when wind infeed overshoots demand in single hours.

Since windreduction is not sufficient to guarantee system stability at all times, an

additional backup technology needed to be implemented in order to reduce the

infeed of more decentral generation, such as PV, biomass, etc. This backup flexibility

can be interpreted as different kinds of technologies. This is an indication that these

regions show future flexibility requirements, which could be solved through, e.g.

demand side management or storage solutions. Another flexibility which certainly

becomes increasingly important with higher deployment of intermitting RES-E

49 Regarding conventional power generation in the scenario, different assumptions on relative comodity prices in 2015/2020 could lead to different outcomes in terms of coal and gas generation.

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technologies is the possibility to exchange power through cross border

interconnections. Figure 7-15 shows the example of Denmark.

Figure 7-15: Example for the usage of NTC as flexibility

-60

-40

-20

0

20

40

60

80

gene

ratio

n in

TW

h

windreductionpumped storagenetimportotherwavetidalgeothermalconcentrating solarphotovoltaicsbiomasswind_offshorewind_onshoresmall-scale hydrolarge hydrogasoilhardcoalnuclearlignite2007 2015 2020 2030

Source: EWI. It can be seen, that RES-E generation exceeds national consumption to a significant

degree which makes the flexibilities of wind-reduction and interregional power

exchange necessary.

Of course the latter option requires that the exported power can be integrated in the

neighboring power system at the particular point in time. This issue requires

additional grid and load flow analyses, which are beyond the scope of this study.

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8 Comparison of the “Business-as-Usual (BAU)” and the “Harmonized Quota System (HQS)” Scenario While in the HQS scenario, RES-E is supported by a Europe-wide technology-neutral

quota, in the BAU scenario promotion policies of every EU27++ country are modeled

in accordance with their current promotion policy. Differences in the outcomes of both

scenarios are thus influenced by a RES-E support which differs on three levels: As in

BAU most countries have a feed-in tariff system, which in addition in most countries

supports RES-E in a technology-specific manner, BAU and HQS differ with regard to

the issues of price-based versus quantity-based support and technology-specific

versus technology-neutral support (see Chapter 4 for a more detailed explanation).

In addition, currently each country has its own national support system while HQS

implies by definition a harmonized support system. Figure 8-1 provides an overview

on the different design elements. It is crucial to emphasize that the BAU scenario is

neither a baseline scenario, nor a prognosis. As chapter 4 explains, the currently

implemented policies are rigorously extrapolated into the future. In reality, these

policies become amended on a regular basis to adjust the feed-in tariffs according to

the performance of the past years. Therefore, the main weakness of the FIT system,

which is the uncertain quantity outcome, is accentuated by this methodology since

future policy adaptations are not taken into account.

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Figure 8-1: Design Differences of the RES-E support systems in BAU and HQS

quantity-basedsupport system

(quota)

price-basedsupport system(feed-in tariffs)

technology-specificsupport

technology-neutralsupport

nationalsupport

harmonizedsupport

vs.

vs.

vs.

dominates Business-As-Usual Scenario Harmonized-Quota Scenario Source: EWI. The first difference between the support systems (price-based versus quantity-based

support) leads to different RES-E quantity deployment paths in the HQS vs. the BAU

scenario (see Figure 8-2). While the quantity-based support leads per definition to a

target fulfillment, the price-based support can lead to over- and/or underfulfillments at

different points of time.

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Figure 8-2: Deployment path of RES-E generation in BAU and HQS (EU27++)

0

200

400

600

800

1,000

1,200

1,400

1,600

2007 2010 2015 2020 2025 2030

RES

-E g

ener

atio

n in

EU

27++

[TW

h]

HQSBAU

Source: EWI.

While on a EU27++ level the targets are underfulfilled throughout the considered

period, on a national level the extrapolation of current promotion systems leads to an

undershooting in some but also to an overshooting of the 2020 targets in other

countries (see Figure 8-3). In BAU, the attained RES-E shares (as far as the majority

of the countries, the FIT-countries, are concerned) result from the maximization of

margins by the investors, thus from the design of the feed-in-tariff-system.50 It is the

national setting of the feed-in tariffs which decides whether the national RES-E

targets are reached or not.

50 Note again that in HQS only the EU-wide quota and not the national targets are decisive for the RES-E deployment. An adjustment to the national targets only takes place ex-post via the trade of TGCs.

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Figure 8-3: RES-E shares vs. RES-E targets 2020 in BAU scenario

-20%

0%

20%

40%

60%

80%

100%

EU-27++

Austria

Belgium

Bulgari

a

Cyprus

Czec R

epub

lic

Denmark

Estonia

Finlan

d

France

German

y

Greece

Hunga

ry

Irelan

dIta

lyLa

tvia

Lithu

ania

Luxe

mbourg

Malta

Netherl

ands

Norway

Poland

Portug

al

Roman

ia

Slovak

ia

Sloven

iaSpa

in

Sweden

Switzerl

and

United

King

dom

RES

-gen

erat

ion

as %

of c

ross

ele

ctric

tiy c

onsu

mpt

ion

hydro wind_onshore wind_offshorebiomass photovoltaics concentrating solargeothermal tidal wavewindreduction RES-E target as % of cross electricity consumption

Source: EWI. The differences between BAU and HQS on the other dimensions (technology-specific

versus technology-neutral and national versus harmonized support) can be seen in

Figure 8-4. While in BAU neither the different RES-E technologies nor the different

European regions compete with each other, HQS is characterized by both

competition between technologies and competition between regions.

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Figure 8-4: Introduction of competition between regions and competition between technologies (switch from BAU to HQS)

BAU

Savings throughharmonization

Savings throughtechnology neutralsupport

HarmonizedQuota System

Competitionbetween regions

Competitionbetween technologiesBAU

Savings throughharmonization

Savings throughtechnology neutralsupport

HarmonizedQuota System

Competitionbetween regions

Competitionbetween technologies

Source: EWI.

Developments in the RES-E submarket In Figure 8-2 could be seen, that although the total RES-E quantity in EU27++ is

lower in BAU scenario that in HQS throughout the considered period, also in BAU the

RES-E generation increases significantly from 2007 until 2030. Figure 8-5 shows the

contribution of the different RES-E technologies to this increase. As in HQS, the

increase is largely driven by wind power, especially by offshore-wind power. In

addition, also as in HQS, biomass generation contributes significantly to the high

RES-E shares reached during the considered period. In contrast to HQS, rather

expensive technologies like geothermal and especially photovoltaics play a largely

more important role.

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Figure 8-5: RES-E Generation EU27++ in BAU Scenario

-500

0

500

1,000

1,500

2,000

2007 2015 2020 2030

gene

ratio

n in

TW

h

wave

tidal

geothermal

concentrating solar

photovoltaics

biomass

wind_offshore

wind_onshore

small-scale hydro

large hydro

BAU

-500

0

500

1,000

1,500

2,000

2007 2015 2020 2030

gene

ratio

n in

TW

h

wave

tidal

geothermal

concentrating solar

photovoltaics

biomass

wind_offshore

wind_onshore

small-scale hydro

large hydro

BAU

Source: EWI. Comparing the development of RES-E capacities between BAU and HQS, it

becomes even more obvious, that BAU is characterized by mainly technology-

specific support. As with regard to the RES-E generation, it catches the eye that

especially photovoltaics-capacities play a largely more important role in BAU than in

HQS. In BAU, the increase in photovoltaics capacity from 2007 to 2030 exceeds the

increase in wind power capacity, so that in 2030 the share of photovoltaics and wind

(on-shore and off-shore) capacities are nearly equal. Still, with regard to RES-E

generation in BAU, wind power contributes more than 2.5 times as much as

photovoltaics to total RES-E generation. This reflects that under the BAU scenario in

many countries the technology-specific support leads to a photovoltaics deployment

also at locations with less favorable potential.

HQSHQS

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Figure 8-6: RES-E capacities in BAU scenario (EU27++)

0

100

200

300

400

500

600

700

2007 2015 2020 2030year

inst

alle

d ca

paci

ty in

GW

wave

tidal

geothermal

concentratingsolarphotovoltaics

biomass

wind_offshore

wind_onshore

small-scale hydro

large hydro

BAU

Source: EWI. Since the RES-E deployment in BAU is not cost-efficient, but based on price-based

support, the structure of RES-E investment costs differs significantly from HQS (see

Figure 8-7). While in HQS the largest shares of investment costs are spent for wind

and thus match with the largest shares of RES-E generation, in BAU the largest

share of investment costs is spent for photovoltaics.

A comparison of total investment costs of the two scenarios would be misleading

because of the different RES-E deployment paths resulting in each scenario (see

Figure 8-2). It still can be noted that while RES-E generation in HQS is higher,

cumulated investment costs are lower. This can be easily explained with the different

investment structure of the technology shares in Figure 8-7.

HQSHQS

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Figure 8-7: Cumulative Investment Costs 2008 – 2020 in BAU scenario (EU27++)

Wind Onshore19%

Hydro0%

PV44%

Wind Offshore15%

Tidal0%

Wave0%

Geothermal6%

Solar3%

Biomass13%

Total: 412 Billion €2007

BAU

Wind Onshore19%

Hydro0%

PV44%

Wind Offshore15%

Tidal0%

Wave0%

Geothermal6%

Solar3%

Biomass13%

Total: 412 Billion €2007

BAU

Source: EWI. Figure 8-8 shows the regional distribution of RES-E generation in BAU. It can be

seen that the extent of the technology-competition effect depends on the specific

support system design of each country in BAU: This design influences to what extent

the RES-E generation mix differs between BAU and HQS. While some countries only

support technologies which are also deployed in an optimal RES-E mix for this

country and thus show little deviations in the generation mix of the two scenarios,

some countries also support high cost technologies at locations with rather low

potentials for this technology. For example in France, a significantly larger amount of

photovoltaics-based electricity is generated in BAU than in HQS. This results from a

support for photovoltaics power which is relatively high in France in comparison to

other European countries, especially after 2010, when support payments for

photovoltaics in most other countries decrease significantly while remaining on a high

level in France. Other countries, especially the quota countries which have a

technology-neutral support also in BAU, do not show deviations between BAU and

HQS with regard to the RES-E technology-mix. Still, they show deviations with regard

to the amount of RES-E produced in the two scenarios. For example Poland and

United Kingdom are both countries with high wind potentials which thus do not only

fulfill their own quotas in HQS, but also help to fulfill the other countries´ quotas in a

Wind Onshore42%

Biomass24%

Geothermal2%

Wave0%

Wind Offshore21%

Hydro2%

PV3%

Solar6%

Tidal0%

HQS

Wind Onshore42%

Biomass24%

Geothermal2%

Wave0%

Wind Offshore21%

Hydro2%

PV3%

Solar6%

Tidal0%

HQS

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cost-efficient manner. For this reason the amount of RES-E generation in HQS in

these countries exceeds the one in BAU.

Figure 8-8: RES-E generation mix in BAU (2020)

Source: EWI.

Analysis of potential efficiency gains The comparison of generation mix, RES-E capacities and investment costs in BAU

and HQS indicate that a transition from BAU to HQS would lead to substantial

efficiency gains – at least as far as static efficiency is concerned. As pointed out in

chapter 3, dynamic efficiency is difficult to measure and is not included in the model

calculations.

As pointed out before, a direct cost comparison between BAU and HQS is not

possible due to different deployment paths. Comparison would imply that costs are

compared for different RES-E quantities. In addition cost differences would arise

solely because RES-E deployment takes place at different points in time.

Thus, it has been necessary to build an auxiliary scenario in which the harmonized

quota scenario reaches exactly the same RES-E quantity paths in time as in BAU.

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The total cost savings (regarding total RES-E costs, which are investment costs,

O&M costs as well as fuel costs and heat remuneration for biomass plants) 51 due to

a switch from BAU to the auxiliary HQS scenario is 174 bill. €200752, which is a cost

reduction of more than one fourth of the total costs in the BAU scenario.

51 Note that these cost savings only refer to the RES-E submarket. Costs arising in the conventional power market are not included. 52 Net Present Value with base year 2007.

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9 Discussion of the Cluster Scenario

As explained above, the cluster scenario is a scenario in-between BAU and HQS, in

which the countries which currently have a quota system (Belgium, United Kingdom,

Poland, Romania, Sweden) form a cluster and can thus benefit from harmonization

effects within this trade-cluster.

The total generation mix of EU27++ does not change much from the mix in BAU

scenario, as the generation mix in the majority of the countries in BAU have a FIT

system and are consequently not influenced by the quota cluster. Therefore, this

section focuses solely on the countries which participate in the trade cluster. Taking a closer look at the generation in the five quota countries, it can be noticed

that in 2020 in the cluster scenario Belgium, Romania and Sweden generate less

RES-E than in BAU.53 The three countries thus benefit from the possibility to not fulfill

their quota on their own but to use the better RES-E potential in UK and Poland. In

Poland and UK, the RES-E generation in Cluster exceeds the one in BAU because

they fulfill not only their own quota but also partly the quota of other quota countries.

In HQS the RES-E generation is even higher than in Cluster, since UK and Poland

still have good wind potentials which can be used to help to fulfill the quota of other

countries and thus to contribute to a European-wide least cost RES-E deployment.

53 In 2020 United Kingdom and Poland generate more RES-E in Cluster than in BAU.

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Figure 9-1: Differences in the RES-E generation 2020 between Cluster, BAU and HQS

0

25

50

75

100

125

150

BE-BAU

BE-Clus

ter

BE-HQS

PL-BAU

PL-Clus

ter

PL-HQS

RO-BAU

RO-Clus

ter

RO-HQS

SE-BAU

SE-Clus

ter

SE-HQS

UK-BAU

UK-Clus

ter

UK-HQS

gene

ratio

n (T

Wh)

WaveTidalGeothermalConcentrating SolarPhotovoltaicsBiomassWind OffshoreWind OnshoreSmall-scale HydroLarge Hydro

Source: EWI. As a consequence of the use of better RES-E locations, cost savings of 35 bill. €2007

(accumulated between 2008 and 2020) compared to BAU can be realized. It can be

seen that Romania avoids the utilization of PV by switching to the Cluster scenario

and Sweden avoids the deployment of offshore wind power. While the additional

generation stems mainly from wind power and biomass from Poland and the UK.

In addition, a comparison of the certificate prices in the three scenarios also shows

the effect of a use of more favorable RES-E locations. Figure 9-2 depicts the

certificate prices in 2020, which result in each scenario from the intersection between

the quota obligation and the marginal costs of the most expensive RES-E technology

needed to fulfill the quota. By definition of the different scenarios, each quota country

has an independent certificate price in BAU while there is only one common

certificate price in Cluster and HQS for all participating countries.

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Figure 9-2: Certificate Prices in 2020 in HQS, Cluster and BAU

0

20

40

60

80

100

120

HQS Cluster Belgium Poland Romania Sweden UnitedKingdom

TGC

pric

e (€

/MW

h)

Source: EWI.

Comparing the certificate prices in HQS and Cluster, it can be seen that the

participating countries in Cluster have altogether relatively favorable resource

potentials compared to their cumulated target. This effect can also be seen by the

generation comparison in Figure 9-1. The RES-E generation in Belgium, Romania

and Sweden is the lowest in the Cluster scenario because they benefit from the

exports from Poland and UK. In HQS, these three countries generate more RES-E to

contribute to the Europe-wide target fulfillment. However, in BAU, especially

Romania and Sweden pay a high price for their isolated support scheme.

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10 Conclusion – Lessons Learned and Implications for Future Developments According to the assessment of regional RES-E potentials, the EU-wide RES-E

target is feasible – however posing significant challenges for the development of the

conventional power system.

Since the HQS is the only scenario which reaches the European RES-E targets due

to the quantity-based setting, and since it does so at minimal RES-E generation cost,

this normative scenario is at the center of our discussion. We summarize the main

findings of HQS and compare it with the scenarios BAU and Cluster. This order

emphasizes that this study includes comparative scenario analyses and no forecast.

Scenarios are extrapolations under given sets of assumptions. They do not reflect

most likely developments. Especially, our BAU scenario freezes current national

RES-E promotion laws. It does not include likely, but in detail unforeseeable

adaptations of these laws.

RES-E support in HQS Scenario

1. RES-E Generation Mix In HQS RES-E are promoted in a Europe-wide and technology-neutral manner.

Optimization of RES-E deployment takes into account regional RES-E generation

costs and national power prices.

In HQS, intermitting wind power deployment plays a dominant role. Especially the

currently still uncertain deployment of offshore wind increases significantly in HQS.

Still expensive technologies like photovoltaics or geothermal power are hardly

deployed under technology-neutral support.

2. RES-E costs The investment costs in the HQS scenario are bill. 313 €2007 accumulated net-

present value between 2008 and 2020. The dominant technologies are wind onshore

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with 42%, wind offshore with 21% and biomass with 24%. The remaining 13 % are

spent for less mature technologies, with a 6% share of concentrating solar as the

largest share of the minor technologies.

3. Regional Distribution and TGC Trade Streams Since the harmonized quota scenario calculates one single Europe-wide RES-E

quota, the individual national targets are reached through an ex-post TGC trade. It is

important to note that national RES-E targets have not been defined by all MS yet.

Therefore in this study these targets needed to be assumed.

Some MS with low or expensive resource potentials gain from buying certificates to

reach their targets, while MS with larger potentials and relatively low targets gain

from deploying additional RES-E above their targets and selling TGCs on the market.

Mainly countries with a high wind power potential deploy RES-E above their national

target. Within the target setting, the wealth of the individual MS has been taken into

account. Eastern European countries received lower targets according to their GDP.

Therefore, it can be seen that altogether the 12 Eastern European countries are net-

exporters of TGCs due to their comparatively low RES-E targets. However, since

some Eastern European MS have still considerable demand growth rates, the target

fulfillment can also require these countries to become net importers. Altogether, the

15 Western European MS import TGC with a value of 3.9 bill €2007 in 2020 when a

GDP weighted target setting is assumed, and 4.6 bill €2007 when a GDP per capita

target-setting is assumed.

4. Harmonization Gains In this study harmonization gains are defined as cost savings in RES-E generation

(investment, O&M, fuel costs and heat remuneration), solely through a switch from

national to harmonized support. In order to calculate these savings, the harmonized

quota scenario is compared with an auxiliary scenario which differs only in this

respect. Therefore, the auxiliary scenario simulates national technology-neutral quota

systems. The potential RES-E cost reduction between these two technology-neutral

scenarios is bill. 118 €2007 accumulated net present value 2008-2020. It is important

to note that this harmonization gain in RES-E generation may be counteracted by

additional costs of e.g. grid enhancements due to higher concentration of intermitting

RES-E in certain regions resulting from harmonized support. Grid costs and

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additional costs in the conventional power systems are not considered in this study,

but would need to be assessed to find an overall efficient solution.

Conventional Power Market in HQS Scenario

5. Total Generation Mix The RES-E share in the EU27 rises to a significant degree of roughly 34 % in 2020

and 45 % in 2030, due to the quantity-based target setting.

Power generation from lignite remains approximately constant, due to relatively low

costs of providing lignite from indigenous mines. Nuclear power generation remains

an important energy source in the European generation mix. The share of hard coal

shrinks in the generation mix, also due to the relevance of the CO2 price and the

lower demand for conventional generation. Due to its lower CO2 intensity, higher

flexibility, and relatively low investment costs natural gas will play a relatively larger

role in the power generation mix.

6. Capacity Effects and Shift in Power Plant Utilization Since RES-E cover an increasing share of demand, the utilization of the installed

conventional power capacities is reduced. In the longer run, this results in a shift

towards a higher share of peak load capacity and a smaller share of base load

capacity. In addition, sufficient backup capacity needs to be installed since only a

small share of the RES-E capacity can be counted as securely available capacity.

This results in a hardly reduced demand for conventional power capacity in order to

fulfill the required security of supply. Altogether the total installed (renewable and

conventional) generating capacity rises significantly to fulfill both the RES-E targets

and the system adequacy criterion.

7. Required Flexibilities in the Power Market The intermittent wind power and to a lesser extent photovoltaics infeed changes the

patterns of the power market in most regions significantly. In addition to demand

structures, especially wind situations become increasingly important for the power

plant dispatch. Especially hours with low demand and high wind power infeed

challenge the power system.

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The model results show that in hours with low load and high wind power

infeed, notable shares of wind infeed are turned down. The absolute amount

of turned-down wind infeed rises over the years, which shows increasing

integration challenges. This indicates that the possibility of wind power

reduction is important to guarantee system stability at all times.

Additionally, the model requires a backstop technology, which is utilized if

generation from other RES-E exceeds load. This indicates demand for

additional flexibilities in the power system, which could be provided by various

measures, such as additional power storages, demand-side management in

industry or households, or more flexible RES-E infeed, e.g. through a more

demand-oriented dispatch of biomass-fired plants.

The model results also show that electricity exports increase in countries with

high shares of wind power. This indicates additional demand of both cross

border transmission capacities and national grid enhancements. The reason is

that wind power generation is relatively concentrated regionally compared to

other RES-E technologies and that the transport of electricity to demand

regions becomes increasingly challenging. Endogenous extensions of the

electricity grid were however not considered in this study.

Comparison with BAU Scenario While in the HQS scenario, RES-E is supported by a Europe-wide technology-neutral

quota, in the BAU scenario promotion policies of every EU27++ country are modeled

in accordance with current policies. For the majority of countries this implies RES-E

support by a technology-specific feed-in tariff system. Differences in the outcomes of

both scenarios are thus influenced by a RES-E support which differs with regard to

the issues of price versus quantity-based support and technology-specific versus

technology-neutral support.

8. RES-E generation in BAU The mainly price-based support in BAU leads to a lower RES-E deployment than

HQS throughout the considered period. (In reality, of course tariffs are likely to be

adjusted, if failure of target achievement is anticipated.) Also in BAU the RES-E

share increases significantly to 32% in 2020. As in HQS the increase is largely driven

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by the deployment of wind power, especially offshore-wind power. In addition, again

similar to HQS, biomass generation contributes significantly. In contrast to HQS,

rather expensive technologies like geothermal and especially photovoltaics play a

more important role.

9. RES-E costs in BAU In the BAU scenario the investment costs of bill. 412 €2007 (accumulated NPV 2008-

2020) are dominated by photovoltaics (44%) and sizeable shares of wind onshore

(19%) and offshore (15%) as well as biomass (13%).

When it comes to the comparison of the generation mix, RES-E capacities and

investment costs in BAU and HQS indicate that HQS contains potential efficiency

gains within the RES-E sector. A direct comparison of costs between BAU and HQS

is however problematic, due to the different quantity deployment paths. Thus, it has

been necessary to build an auxiliary scenario in which the harmonized quota

scenario reaches exactly the same RES-E amount as in the BAU scenario with the

same timely deployment path. Total RES-E cost savings of a switch from BAU to the

auxiliary HQS is 174 bill. €2007 net present value accumulated 2008-2020. These cost

savings arise from two effects, first due to the change from a national to a EU-

harmonized support, and secondly due to the change from a mainly technology-

specific to a technology-neutral support of RES-E in Europe.

Comparison with the Cluster Scenario The cluster scenario is a scenario between BAU and HQS, in which the countries

which currently have a quota system (Belgium, United Kingdom, Poland, Romania,

Sweden) form a cluster and can thus benefit from harmonization effects within this

trade-cluster. Countries which currently support RES-E by feed-in tariffs, bonus

systems or tax incentives, are modeled as in BAU.

10. RES-E generation in Cluster On a EU27++ level the generation mix in the Cluster scenario does not change much

from the mix in BAU, as generation in the majority of countries in BAU have a FIT

system and are consequently not influenced by the quota cluster.

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Within the cluster countries, it can be noticed that in 2020 Belgium, Romania and

Sweden generate less RES-E than in BAU. The three countries thus benefit from the

possibility to not fulfill their quota on their own but rather import TGC from UK and

Poland. As a consequence of the use of better RES-E locations, cost savings of 35

bill. €2007 accumulated NPV 2008-2020 compared to BAU can be realized.

11. Outlook Currently, many different promotion schemes for electricity generation from

renewable energy sources (RES-E) are in effect in Europe. A more harmonized

approach would enable to utilize considerable cost-savings in RES-E generation, as

a result of competition between plant locations. In addition, the introduction of

competition between technologies would lead to substantial cost-savings. Such

efficiency gains however have to be balanced with additional integration costs,

especially grid costs due to a regionally more concentrated deployment of some

RES-E technologies under a more harmonized and technology-neutral promotion

scheme. A detailed balancing of such costs and benefits of harmonization has not

been considered in this study.

Utilizing cost-efficient RES-E potentials throughout Europe is essential. Therefore, an

integrated geographical and intertemporal optimization is crucial to balance the

different lead times, lifetimes and deployment times between the grid infrastructure

as well as conventional and renewable generating capacities. One can conclude that

while a more EU-harmonized approach to RES-E promotion than in place today is

certainly recommendable, a strategy for optimum integration of RES-E calls for

further research, encompassing aspects of both generation and transport of

electricity in Europe.

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ATTACHMENTS

A. Generation Figures The first part of the attachments includes tables depicting the generation in TWh of

each technology in each EU27++ country for the three main scenarios.

Two remarks are important to add:

1) The figures accounted for „Pumped Storage” - marked with an asterisk - refer to

the energy consumption of pumped storage power plants and are thus negative

figures. Generation from pumped storage power plants is subsumed in the large –

scale hydro figures.

2) Columns highlighted in grey indicate that in the respective country and in the

respective year, integration challenges require the deployment of a model-intern

backstop flexibility technology, which simulates different flexibility options. This

backstop technology has a net electricity loss, which increases the generation in

these countries.

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2007 2015 2020 2030

Coal 571 589 521 275Lignite 351 347 369 377Gas 724 490 481 426Oil 107 50 49 43Nuclear 885 884 887 817Large Hydro 292 312 325 335Small-scale Hydro 41 50 52 52Pumped Storage* -45 -31 -49 -64Other non-renewables 18 17 17 17Wind Onshore 104 281 407 546Wind Offshore 0 62 153 339Biomass 96 269 298 302Photovoltaics 4 5 13 39Concentrating Solar 0 13 31 70Geothermal 5 17 27 54Tidal 0 0 0 0Wave 0 0 0 0Net Import 10 18 30 26Windreduction 0 -13 -27 -70

Sum 3165 3359 3585 3585

RES-E Share 15% 28% 34% 45%

EU27HQS

generation in TWh

2007 2015 2020 2030

Coal 571 657 559 303Lignite 351 349 376 396Gas 724 507 480 481Oil 107 49 46 46Nuclear 885 885 894 835Large Hydro 292 304 320 329Small-scale Hydro 41 46 46 46Pumped Storage* -45 -20 -42 -55Other non-renewables 34 17 17 17Wind Onshore 104 188 292 362Wind Offshore 0 51 136 274Biomass 96 211 236 222Photovoltaics 4 88 155 243Concentrating Solar 0 10 18 24Geothermal 5 16 37 80Tidal 0 0 0 2Wave 0 0 0 4Net Import 10 2 21 22Windreduction 0 -1 -4 -35

Sum 3181 3360 3587 3593

RES-E Share 15% 26% 32% 41%

EU27BAU

generation in TWh

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2007 2015 2020 2030

Coal 571 641 553 323Lignite 351 349 377 389Gas 724 512 483 477Oil 107 46 46 46Nuclear 885 885 895 836Large Hydro 292 305 321 329Small-scale Hydro 41 46 46 46Pumped Storage* -45 -21 -44 -55Other non-renewables 34 17 17 17Wind Onshore 104 200 311 391Wind Offshore 0 52 126 291Biomass 96 212 233 205Photovoltaics 4 88 152 228Concentrating Solar 0 10 18 24Geothermal 5 16 37 62Tidal 0 0 0 2Wave 0 0 0 4Net Import 10 3 21 24Windreduction 0 -1 -7 -45

Sum 3181 3360 3588 3593

RES-E Share 15% 26% 32% 41%

EU27Cluster

generation in TWh

2007 2015 2020 2030

Coal 571 589 521 275Lignite 351 347 369 377Gas 725 490 482 427Oil 107 50 49 43Nuclear 912 900 918 845Large Hydro 454 459 472 483Small-scale Hydro 50 60 62 62Pumped Storage* -49 -33 -52 -68Other non-renewables 18 17 17 17Wind Onshore 105 288 414 553Wind Offshore 0 70 161 348Biomass 99 274 304 307Photovoltaics 4 5 13 39Concentrating Solar 0 13 31 70Geothermal 5 17 27 54Tidal 0 0 0 0Wave 0 0 0 0Net Import -2 13 12 12Windreduction 0 -13 -27 -70

Sum 3351 3546 3775 3775

RES-E Share 19% 31% 37% 47%

generation in TWhEU27++HQS

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2007 2015 2020 2030

Coal 571 657 559 303Lignite 351 349 376 396Gas 725 508 481 481Oil 107 49 46 46Nuclear 912 901 920 864Large Hydro 454 450 466 476Small-scale Hydro 50 55 55 55Pumped Storage* -49 -21 -44 -57Other non-renewables 35 17 17 17Wind Onshore 105 189 299 369Wind Offshore 0 51 136 274Biomass 99 214 239 225Photovoltaics 4 89 156 243Concentrating Solar 0 10 18 24Geothermal 5 16 45 87Tidal 0 0 0 2Wave 0 0 0 4Net Import -2 13 12 11Windreduction 0 -1 -4 -35

Sum 3368 3547 3777 3783

RES-E Share 19% 29% 35% 44%

generation in TWhEU27++BAU

2007 2015 2020 2030

Coal 571 641 553 323Lignite 351 349 377 389Gas 725 513 484 478Oil 107 46 46 46Nuclear 912 901 921 867Large Hydro 454 451 467 476Small-scale Hydro 50 55 55 55Pumped Storage* -49 -22 -45 -57Other non-renewables 35 17 17 17Wind Onshore 105 201 317 397Wind Offshore 0 52 126 291Biomass 99 215 236 208Photovoltaics 4 89 152 228Concentrating Solar 0 10 18 24Geothermal 5 16 45 70Tidal 0 0 0 2Wave 0 0 0 4Net Import -2 13 13 11Windreduction 0 -1 -7 -45

Sum 3368 3547 3778 3783

RES-E Share 19% 29% 35% 43%

generation in TWhEU27++Cluster

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2007 2015 2020 2030

Coal 6 3 3 1Lignite 0 0 0 0Gas 11 14 14 14Oil 1 2 2 2Nuclear 0 0 0 0Large Hydro 31 34 35 35Small-scale Hydro 5 5 5 5Pumped Storage* -3 0 -1 -1Other non-renewables 1 1 1 1Wind Onshore 2 3 4 5Wind Offshore 0 0 0 0Biomass 4 4 4 5Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 7 2 6 6Windreduction 0 0 0 0

Sum 63 68 73 73

RES-E Share 55% 65% 61% 64%

AustriaHQS

generation in TWh

2007 2015 2020 2030

Coal 6 3 3 1Lignite 0 0 0 0Gas 11 14 14 14Oil 1 2 2 2Nuclear 0 0 0 0Large Hydro 31 34 34 35Small-scale Hydro 5 5 5 5Pumped Storage* -3 0 0 -1Other non-renewables 0 1 1 1Wind Onshore 2 2 2 0Wind Offshore 0 0 0 0Biomass 4 3 2 3Photovoltaics 0 4 7 10Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 7 0 3 4Windreduction 0 0 0 0

Sum 63 68 73 73

RES-E Share 55% 67% 65% 68%

Austria BAU

generation in TWh

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2007 2015 2020 2030

Coal 6 3 3 1Lignite 0 0 0 0Gas 11 14 14 14Oil 1 2 2 2Nuclear 0 0 0 0Large Hydro 31 34 34 35Small-scale Hydro 5 5 5 5Pumped Storage* -3 0 0 -1Other non-renewables 0 1 1 1Wind Onshore 2 2 2 0Wind Offshore 0 0 0 0Biomass 4 3 2 3Photovoltaics 0 4 7 10Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 7 0 3 4Windreduction 0 0 0 0

Sum 63 68 73 73

RES-E Share 55% 67% 65% 68%

Austria Cluster

generation in TWh

2007 2015 2020 2030

Coal 6 10 11 17Lignite 0 0 0 0Gas 26 9 11 12Oil 1 0 0 0Nuclear 46 35 27 0Large Hydro 1 1 2 2Small-scale Hydro 0 0 0 0Pumped Storage* -2 -1 -2 -3Other non-renewables 1 1 1 1Wind Onshore 0 8 9 10Wind Offshore 0 4 8 8Biomass 3 7 7 9Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 7 23 33 50Windreduction 0 0 0 0

Sum 90 98 106 106

RES-E Share 4% 19% 22% 24%

BelgiumHQS

generation in TWh

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2007 2015 2020 2030

Coal 6 12 14 18Lignite 0 0 0 0Gas 26 10 10 11Oil 1 0 0 0Nuclear 46 35 27 0Large Hydro 1 1 2 2Small-scale Hydro 0 0 0 0Pumped Storage* -2 -1 -2 -2Other non-renewables 2 1 1 1Wind Onshore 0 7 9 10Wind Offshore 0 1 7 9Biomass 3 7 7 9Photovoltaics 0 0 0 1Concentrating Solar 0 0 0 0Geothermal 0 0 0 7Tidal 0 0 0 0Wave 0 0 0 0Net Import 7 26 30 42Windreduction 0 0 0 0

Sum 91 98 106 106

RES-E Share 4% 15% 22% 33%

BelgiumBAU

generation in TWh

2007 2015 2020 2030

Coal 6 11 16 29Lignite 0 0 0 0Gas 26 10 10 10Oil 1 0 0 0Nuclear 46 35 28 0Large Hydro 1 1 1 2Small-scale Hydro 0 0 0 0Pumped Storage* -2 -1 -2 -2Other non-renewables 2 1 1 1Wind Onshore 0 9 9 9Wind Offshore 0 1 4 9Biomass 3 7 7 5Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 7 24 30 43Windreduction 0 0 0 0

Sum 91 98 106 106

RES-E Share 4% 17% 19% 22%

Belgium Cluster

generation in TWh

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2007 2015 2020 2030

Coal 5 1 1 1Lignite 14 7 7 7Gas 2 2 2 2Oil 0 1 1 1Nuclear 14 14 22 21Large Hydro 3 4 4 4Small-scale Hydro 1 1 1 1Pumped Storage* -1 -2 -1 -2Other non-renewables 0 0 0 0Wind Onshore 0 0 0 0Wind Offshore 0 0 0 0Biomass 0 6 6 8Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -4 0 -4 -5Windreduction 0 0 0 0

Sum 34 33 37 37

RES-E Share 7% 28% 26% 30%

BulgariaHQS

generation in TWh

2007 2015 2020 2030

Coal 5 4 3 1Lignite 14 7 7 8Gas 2 2 2 2Oil 0 1 1 1Nuclear 14 14 14 12Large Hydro 3 3 3 5Small-scale Hydro 1 0 0 0Pumped Storage* -1 -1 -1 -3Other non-renewables 0 0 0 0Wind Onshore 0 0 0 0Wind Offshore 0 0 0 0Biomass 0 1 1 0Photovoltaics 0 0 3 9Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -4 2 3 3Windreduction 0 0 0 0

Sum 34 33 37 37

RES-E Share 7% 12% 18% 32%

Bulgaria BAU

generation in TWh

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2007 2015 2020 2030

Coal 5 3 3 1Lignite 14 7 7 8Gas 2 2 2 2Oil 0 1 1 1Nuclear 14 14 14 12Large Hydro 3 3 3 4Small-scale Hydro 1 0 0 0Pumped Storage* -1 -1 0 -2Other non-renewables 0 0 0 0Wind Onshore 0 0 0 0Wind Offshore 0 0 0 0Biomass 0 1 1 0Photovoltaics 0 0 3 9Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -4 2 4 3Windreduction 0 0 0 0

Sum 34 33 37 37

RES-E Share 7% 12% 18% 32%

Bulgaria Cluster

generation in TWh

2007 2015 2020 2030

Coal 0 0 0 0Lignite 0 0 0 0Gas 0 0 0 0Oil 5 3 3 1Nuclear 0 0 0 0Large Hydro 0 0 0 0Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 0 0 0Wind Offshore 0 0 0 0Biomass 0 0 0 0Photovoltaics 0 0 1 3Concentrating Solar 0 1 1 1Geothermal 0 0 0 1Tidal 0 0 0 0Wave 0 0 0 0Net Import 0 0 0 0Windreduction 0 0 0 0

Sum 5 4 5 6

RES-E Share 0% 24% 45% 99%

CyprusHQS

generation in TWh

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2007 2015 2020 2030

Coal 0 0 0 0Lignite 0 0 0 0Gas 0 0 0 0Oil 5 2 2 2Nuclear 0 0 0 0Large Hydro 0 0 0 0Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 0 0 0Wind Offshore 0 0 0 0Biomass 0 0 0 0Photovoltaics 0 2 2 3Concentrating Solar 0 0 1 1Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 0 0 0 0Windreduction 0 0 0 0

Sum 5 5 5 5

RES-E Share 0% 55% 67% 72%

Cyprus BAU

generation in TWh

2007 2015 2020 2030

Coal 0 0 0 0Lignite 0 0 0 0Gas 0 0 0 0Oil 5 2 2 2Nuclear 0 0 0 0Large Hydro 0 0 0 0Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 0 0 0Wind Offshore 0 0 0 0Biomass 0 0 0 0Photovoltaics 0 2 2 3Concentrating Solar 0 0 1 1Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 0 0 0 0Windreduction 0 0 0 0

Sum 5 5 5 5

RES-E Share 0% 55% 67% 72%

Cyprus Cluster

generation in TWh

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2007 2015 2020 2030

Coal 7 2 3 1Lignite 42 51 63 66Gas 4 1 1 1Oil 0 0 0 0Nuclear 25 26 26 20Large Hydro 2 2 2 3Small-scale Hydro 1 1 1 1Pumped Storage* -1 -1 -2 -2Other non-renewables 0 0 0 0Wind Onshore 0 11 19 20Wind Offshore 0 0 0 0Biomass 1 6 7 8Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -16 -31 -21 -18Windreduction 0 0 0 0

Sum 65 67 99 99

RES-E Share 5% 26% 27% 29%

Czech RepublicHQS

generation in TWh

2007 2015 2020 2030

Coal 7 1 1 0Lignite 42 51 61 60Gas 4 1 1 1Oil 0 0 0 0Nuclear 25 26 25 13Large Hydro 2 2 4 3Small-scale Hydro 1 1 1 1Pumped Storage* -1 -2 -3 -3Other non-renewables 0 0 0 0Wind Onshore 0 11 16 16Wind Offshore 0 0 0 0Biomass 1 8 10 11Photovoltaics 0 10 15 22Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -16 -42 -30 -25Windreduction 0 0 0 -1

Sum 65 67 99 100

RES-E Share 5% 43% 40% 49%

Czech Republic BAU

generation in TWh

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137

2007 2015 2020 2030

Coal 7 1 1 0Lignite 42 51 61 59Gas 4 1 1 1Oil 0 0 0 0Nuclear 25 26 25 13Large Hydro 2 2 4 3Small-scale Hydro 1 1 1 1Pumped Storage* -1 -2 -3 -3Other non-renewables 0 0 0 0Wind Onshore 0 11 16 16Wind Offshore 0 0 0 0Biomass 1 8 10 11Photovoltaics 0 10 15 22Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -16 -42 -29 -24Windreduction 0 0 0 0

Sum 65 67 99 100

RES-E Share 5% 43% 40% 49%

Czech Republic Cluster

generation in TWh

2007 2015 2020 2030

Coal 19 12 12 12Lignite 0 0 0 0Gas 7 10 10 10Oil 1 4 4 4Nuclear 0 0 0 0Large Hydro 0 0 0 0Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 0 0 0 0Wind Onshore 7 12 13 12Wind Offshore 0 12 27 31Biomass 4 6 5 2Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -1 -23 -29 -29Windreduction 0 -2 -10 -9

Sum 37 32 33 33

RES-E Share 28% 91% 130% 130%

DenmarkHQS

generation in TWh

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138

2007 2015 2020 2030

Coal 19 12 12 12Lignite 0 0 0 0Gas 7 10 10 10Oil 1 4 4 4Nuclear 0 0 0 0Large Hydro 0 0 0 0Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 3 0 0 0Wind Onshore 7 9 13 12Wind Offshore 0 3 6 28Biomass 4 6 6 6Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -1 -12 -18 -30Windreduction 0 0 -1 -9

Sum 39 32 33 33

RES-E Share 28% 52% 72% 130%

DenmarkBAU

generation in TWh

2007 2015 2020 2030

Coal 19 12 12 12Lignite 0 0 0 0Gas 7 10 10 10Oil 1 4 4 4Nuclear 0 0 0 0Large Hydro 0 0 0 0Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 3 0 0 0Wind Onshore 7 9 13 12Wind Offshore 0 3 6 28Biomass 4 6 6 6Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -1 -12 -18 -30Windreduction 0 0 -1 -9

Sum 39 32 33 33

RES-E Share 28% 52% 72% 130%

Denmark Cluster

generation in TWh

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139

2007 2015 2020 2030

Coal 0 0 0 0Lignite 10 7 8 10Gas 1 0 0 0Oil 0 0 0 0Nuclear 0 0 0 0Large Hydro 0 0 0 0Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 8 8 10Wind Offshore 0 0 0 0Biomass 0 1 1 1Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -2 -5 -5 -8Windreduction 0 -1 -1 -1

Sum 8 10 12 12

RES-E Share 1% 88% 79% 88%

EstoniaHQS

generation in TWh

2007 2015 2020 2030

Coal 0 0 0 0Lignite 10 7 9 11Gas 1 0 0 0Oil 0 0 0 0Nuclear 0 0 0 0Large Hydro 0 0 0 0Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 3 10 10Wind Offshore 0 0 0 0Biomass 0 1 1 0Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -2 -1 -7 -9Windreduction 0 0 -1 -1

Sum 9 10 12 12

RES-E Share 1% 34% 88% 88%

EstoniaBAU

generation in TWh

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140

2007 2015 2020 2030

Coal 0 0 0 0Lignite 10 7 8 11Gas 1 0 0 0Oil 0 0 0 0Nuclear 0 0 0 0Large Hydro 0 0 0 0Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 3 10 10Wind Offshore 0 0 0 0Biomass 0 1 1 0Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -2 -1 -6 -9Windreduction 0 0 -1 -1

Sum 9 10 12 12

RES-E Share 1% 34% 88% 88%

Estonia Cluster

generation in TWh

2007 2015 2020 2030

Coal 13 10 9 6Lignite 7 7 7 7Gas 11 9 9 9Oil 0 1 1 1Nuclear 23 31 21 38Large Hydro 13 12 12 12Small-scale Hydro 1 1 1 1Pumped Storage* 0 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 2 7 8Wind Offshore 0 0 0 0Biomass 10 10 10 12Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 13 12 23 7Windreduction 0 0 0 0

Sum 90 94 101 101

RES-E Share 25% 26% 30% 31%

FinlandHQS

generation in TWh

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141

2007 2015 2020 2030

Coal 13 15 13 6Lignite 7 6 6 7Gas 11 9 9 9Oil 0 1 1 1Nuclear 23 31 33 41Large Hydro 13 12 12 12Small-scale Hydro 1 1 1 1Pumped Storage* 0 0 0 0Other non-renewables 2 0 0 0Wind Onshore 0 0 0 0Wind Offshore 0 0 0 0Biomass 10 0 1 1Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 13 19 24 23Windreduction 0 0 0 0

Sum 92 94 101 101

RES-E Share 25% 14% 14% 14%

FinlandBAU

generation in TWh

2007 2015 2020 2030

Coal 13 15 12 6Lignite 7 6 6 7Gas 11 9 9 9Oil 0 1 1 1Nuclear 23 31 43 69Large Hydro 13 12 12 12Small-scale Hydro 1 1 1 1Pumped Storage* 0 0 0 0Other non-renewables 2 0 0 0Wind Onshore 0 0 0 0Wind Offshore 0 0 0 0Biomass 10 1 1 0Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 13 17 14 -5Windreduction 0 0 0 0

Sum 92 94 101 101

RES-E Share 25% 15% 14% 14%

Finland Cluster

generation in TWh

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142

2007 2015 2020 2030

Coal 23 29 20 5Lignite 0 0 0 0Gas 24 17 24 19Oil 6 1 1 1Nuclear 419 427 442 465Large Hydro 57 59 61 60Small-scale Hydro 6 7 7 7Pumped Storage* -8 -5 -7 -7Other non-renewables 1 1 1 1Wind Onshore 4 32 42 63Wind Offshore 0 3 16 37Biomass 5 30 30 28Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 1 1 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -57 -86 -90 -133Windreduction 0 0 0 0

Sum 481 517 547 547

RES-E Share 13% 24% 26% 33%

generation in TWhFranceHQS

2007 2015 2020 2030

Coal 23 37 23 3Lignite 0 0 0 0Gas 24 20 19 21Oil 6 1 1 1Nuclear 419 427 443 460Large Hydro 57 59 60 61Small-scale Hydro 6 7 7 7Pumped Storage* -8 -4 -6 -7Other non-renewables 2 1 1 1Wind Onshore 4 10 21 32Wind Offshore 0 7 19 43Biomass 5 14 19 21Photovoltaics 0 12 22 38Concentrating Solar 0 0 0 0Geothermal 0 1 1 0Tidal 0 0 0 2Wave 0 0 0 1Net Import -57 -74 -83 -136Windreduction 0 0 0 0

Sum 482 517 547 547

RES-E Share 13% 20% 25% 35%

generation in TWhFranceBAU

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143

2007 2015 2020 2030

Coal 23 36 23 3Lignite 0 0 0 0Gas 24 20 20 21Oil 6 1 1 1Nuclear 419 427 443 459Large Hydro 57 59 60 61Small-scale Hydro 6 7 7 7Pumped Storage* -8 -4 -6 -7Other non-renewables 2 1 1 1Wind Onshore 4 10 21 32Wind Offshore 0 7 19 43Biomass 5 14 19 21Photovoltaics 0 12 22 38Concentrating Solar 0 0 0 0Geothermal 0 1 1 0Tidal 0 0 0 2Wave 0 0 0 1Net Import -57 -74 -84 -135Windreduction 0 0 0 0

Sum 482 517 547 547

RES-E Share 13% 20% 25% 35%

generation in TWhFrance Cluster

2007 2015 2020 2030

Coal 123 107 98 36Lignite 156 154 164 182Gas 78 92 97 94Oil 10 3 3 0Nuclear 133 99 49 0Large Hydro 18 18 21 24Small-scale Hydro 8 11 13 13Pumped Storage* -9 -8 -12 -15Other non-renewables 4 4 4 4Wind Onshore 40 40 49 69Wind Offshore 0 17 39 49Biomass 28 44 43 45Photovoltaics 3 3 3 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -17 -16 19 89Windreduction 0 0 0 0

Sum 576 570 590 590

RES-E Share 14% 21% 25% 30%

generation in TWhGermanyHQS

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144

2007 2015 2020 2030

Coal 123 132 108 42Lignite 156 154 165 183Gas 78 97 106 148Oil 10 3 0 0Nuclear 133 99 49 0Large Hydro 18 15 19 20Small-scale Hydro 8 9 9 9Pumped Storage* -9 -4 -8 -11Other non-renewables 6 4 4 4Wind Onshore 40 37 38 15Wind Offshore 0 20 35 43Biomass 28 37 36 15Photovoltaics 3 6 6 0Concentrating Solar 0 0 0 0Geothermal 0 0 11 11Tidal 0 0 0 0Wave 0 0 0 0Net Import -17 -38 13 109Windreduction 0 0 0 0

Sum 579 570 590 590

RES-E Share 14% 20% 23% 17%

generation in TWhGermanyBAU

2007 2015 2020 2030

Coal 123 134 109 42Lignite 156 154 165 183Gas 78 108 107 150Oil 10 0 0 0Nuclear 133 99 49 0Large Hydro 18 16 19 20Small-scale Hydro 8 9 9 9Pumped Storage* -9 -4 -8 -11Other non-renewables 6 4 4 4Wind Onshore 40 37 38 15Wind Offshore 0 20 35 43Biomass 28 37 36 15Photovoltaics 3 6 6 0Concentrating Solar 0 0 0 0Geothermal 0 0 11 11Tidal 0 0 0 0Wave 0 0 0 0Net Import -17 -49 11 108Windreduction 0 0 0 0

Sum 579 570 590 590

RES-E Share 14% 20% 23% 17%

generation in TWhGermany Cluster

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145

2007 2015 2020 2030

Coal 0 14 13 10Lignite 32 23 23 25Gas 13 3 2 1Oil 9 1 1 1Nuclear 0 0 0 0Large Hydro 3 4 4 5Small-scale Hydro 0 1 1 1Pumped Storage* -1 0 -1 -1Other non-renewables 0 0 0 0Wind Onshore 2 5 7 8Wind Offshore 0 0 0 0Biomass 0 3 3 3Photovoltaics 0 0 0 0Concentrating Solar 0 3 4 4Geothermal 0 2 2 2Tidal 0 0 0 0Wave 0 0 0 0Net Import 4 5 7 9Windreduction 0 0 0 0

Sum 62 63 67 67

RES-E Share 7% 26% 30% 32%

GreeceHQS

generation in TWh

2007 2015 2020 2030

Coal 0 7 6 3Lignite 32 23 23 18Gas 13 4 0 0Oil 9 1 1 1Nuclear 0 0 0 0Large Hydro 3 4 5 5Small-scale Hydro 0 0 0 0Pumped Storage* -1 -1 -1 -1Other non-renewables 0 0 0 0Wind Onshore 2 2 2 2Wind Offshore 0 0 0 0Biomass 0 0 0 0Photovoltaics 0 15 25 36Concentrating Solar 0 3 4 4Geothermal 0 2 2 2Tidal 0 0 0 0Wave 0 0 0 0Net Import 4 3 1 1Windreduction 0 0 0 0

Sum 62 64 68 71

RES-E Share 7% 39% 54% 70%

GreeceBAU

generation in TWh

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146

2007 2015 2020 2030

Coal 0 7 7 3Lignite 32 23 23 18Gas 13 4 0 0Oil 9 1 1 1Nuclear 0 0 0 0Large Hydro 3 4 5 5Small-scale Hydro 0 0 0 0Pumped Storage* -1 -1 -1 -1Other non-renewables 0 0 0 0Wind Onshore 2 2 2 2Wind Offshore 0 0 0 0Biomass 0 0 0 0Photovoltaics 0 15 25 36Concentrating Solar 0 3 4 4Geothermal 0 2 2 2Tidal 0 0 0 0Wave 0 0 0 0Net Import 4 3 1 1Windreduction 0 0 0 0

Sum 62 64 68 71

RES-E Share 7% 39% 54% 70%

Greece Cluster

generation in TWh

2007 2015 2020 2030

Coal 1 2 2 0Lignite 6 5 5 5Gas 14 7 7 7Oil 0 0 0 0Nuclear 14 13 12 2Large Hydro 0 0 0 0Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 2 8 8Wind Offshore 0 0 0 0Biomass 2 14 18 23Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 4 2 -4 4Windreduction 0 0 0 -1

Sum 41 46 48 48

RES-E Share 4% 34% 53% 64%

HungaryHQS

generation in TWh

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147

2007 2015 2020 2030

Coal 1 2 2 0Lignite 6 3 5 5Gas 14 7 7 7Oil 0 0 0 0Nuclear 14 13 12 3Large Hydro 0 0 0 0Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 1 0 0 0Wind Onshore 0 2 8 8Wind Offshore 0 0 0 0Biomass 2 12 13 8Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 4 6 1 16Windreduction 0 0 0 -1

Sum 42 46 48 48

RES-E Share 4% 32% 43% 35%

Hungary BAU

generation in TWh

2007 2015 2020 2030

Coal 1 2 1 0Lignite 6 3 5 5Gas 14 7 7 7Oil 0 0 0 0Nuclear 14 13 12 9Large Hydro 0 0 0 0Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 1 0 0 0Wind Onshore 0 2 8 8Wind Offshore 0 0 0 0Biomass 2 13 13 8Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 4 6 1 10Windreduction 0 0 0 0

Sum 42 46 48 48

RES-E Share 4% 33% 44% 35%

Hungary Cluster

generation in TWh

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148

2007 2015 2020 2030

Coal 5 3 3 2Lignite 2 1 2 2Gas 15 3 3 3Oil 2 0 0 0Nuclear 0 0 0 0Large Hydro 1 1 1 1Small-scale Hydro 0 0 0 0Pumped Storage* -1 -1 -1 -1Other non-renewables 3 3 3 3Wind Onshore 2 22 25 29Wind Offshore 0 0 0 0Biomass 0 6 6 3Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 1 0 1 1Windreduction 0 -9 -9 -10

Sum 32 30 33 33

RES-E Share 9% 91% 92% 97%

IrelandHQS

generation in TWh

2007 2015 2020 2030

Coal 5 15 15 6Lignite 2 2 2 1Gas 15 4 5 2Oil 2 0 0 0Nuclear 0 0 0 0Large Hydro 1 1 1 1Small-scale Hydro 0 0 0 0Pumped Storage* -1 0 -1 -1Other non-renewables 0 3 3 3Wind Onshore 2 3 4 29Wind Offshore 0 0 0 0Biomass 0 0 0 0Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 1 2 3 0Windreduction 0 0 0 -8

Sum 29 30 33 33

RES-E Share 9% 11% 15% 87%

IrelandBAU

generation in TWh

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149

2007 2015 2020 2030

Coal 5 15 15 6Lignite 2 2 2 1Gas 15 4 5 2Oil 2 0 0 0Nuclear 0 0 0 0Large Hydro 1 1 1 1Small-scale Hydro 0 0 0 0Pumped Storage* -1 0 0 -1Other non-renewables 0 3 3 3Wind Onshore 2 3 4 29Wind Offshore 0 0 0 0Biomass 0 0 0 0Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 1 2 3 0Windreduction 0 0 0 -8

Sum 29 30 33 33

RES-E Share 9% 11% 15% 87%

Ireland Cluster

generation in TWh

2007 2015 2020 2030

Coal 42 84 69 32Lignite 0 0 0 0Gas 170 119 108 83Oil 34 18 18 18Nuclear 0 0 22 99Large Hydro 31 39 39 41Small-scale Hydro 7 9 9 9Pumped Storage* -8 -5 -5 -8Other non-renewables 2 2 2 2Wind Onshore 4 6 6 8Wind Offshore 0 0 0 0Biomass 6 21 22 23Photovoltaics 0 0 8 22Concentrating Solar 0 2 5 6Geothermal 5 13 23 48Tidal 0 0 0 0Wave 0 0 0 0Net Import 46 68 80 22Windreduction 0 0 0 0

Sum 340 376 405 405

RES-E Share 13% 22% 26% 36%

Italy HQS

generation in TWh

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150

2007 2015 2020 2030

Coal 42 69 53 23Lignite 0 0 0 0Gas 170 120 107 80Oil 34 18 18 18Nuclear 0 0 22 87Large Hydro 31 37 39 40Small-scale Hydro 7 9 9 9Pumped Storage* -8 -2 -5 -7Other non-renewables 2 2 2 2Wind Onshore 4 6 14 17Wind Offshore 0 0 0 0Biomass 6 22 22 23Photovoltaics 0 17 28 40Concentrating Solar 0 0 0 0Geothermal 5 13 23 48Tidal 0 0 0 0Wave 0 0 0 0Net Import 46 65 74 23Windreduction 0 0 0 0

Sum 341 376 405 405

RES-E Share 13% 26% 31% 41%

Italy BAU

generation in TWh

2007 2015 2020 2030

Coal 42 69 53 23Lignite 0 0 0 0Gas 170 121 107 79Oil 34 18 18 18Nuclear 0 0 22 90Large Hydro 31 37 39 40Small-scale Hydro 7 9 9 9Pumped Storage* -8 -2 -5 -7Other non-renewables 2 2 2 2Wind Onshore 4 6 14 17Wind Offshore 0 0 0 0Biomass 6 22 22 23Photovoltaics 0 17 28 40Concentrating Solar 0 0 0 0Geothermal 5 13 23 48Tidal 0 0 0 0Wave 0 0 0 0Net Import 46 65 73 23Windreduction 0 0 0 0

Sum 341 376 405 405

RES-E Share 13% 26% 31% 41%

Italy Cluster

generation in TWh

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151

2007 2015 2020 2030

Coal 0 0 0 0Lignite 0 0 0 0Gas 2 3 3 3Oil 0 0 0 0Nuclear 0 0 0 0Large Hydro 3 3 3 3Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 2 3 3Wind Offshore 0 0 0 0Biomass 0 2 2 2Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 3 1 2 2Windreduction 0 -1 -1 0

Sum 8 11 12 12

RES-E Share 36% 77% 69% 69%

LatviaHQS

generation in TWh

2007 2015 2020 2030

Coal 0 0 1 1Lignite 0 0 0 0Gas 2 3 3 3Oil 0 0 0 0Nuclear 0 0 0 0Large Hydro 3 3 3 3Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 2 2 2Wind Offshore 0 0 0 0Biomass 0 4 3 3Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 3 0 1 1Windreduction 0 0 0 0

Sum 8 11 12 12

RES-E Share 36% 81% 69% 69%

LatviaBAU

generation in TWh

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152

2007 2015 2020 2030

Coal 0 0 0 0Lignite 0 0 0 0Gas 2 3 3 3Oil 0 0 0 0Nuclear 0 0 0 0Large Hydro 3 3 3 3Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 2 2 2Wind Offshore 0 0 0 0Biomass 0 4 3 3Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 3 0 2 2Windreduction 0 0 0 0

Sum 8 11 12 12

RES-E Share 36% 81% 69% 69%

Latvia Cluster

generation in TWh

2007 2015 2020 2030

Coal 0 0 0 0Lignite 0 0 0 0Gas 2 2 2 2Oil 0 1 1 1Nuclear 9 8 9 0Large Hydro 1 1 1 1Small-scale Hydro 0 0 0 0Pumped Storage* -1 -1 -1 -1Other non-renewables 0 0 0 0Wind Onshore 0 0 1 2Wind Offshore 0 0 0 0Biomass 0 5 7 5Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -1 -3 -4 7Windreduction 0 0 0 0

Sum 11 14 17 17

RES-E Share 4% 43% 56% 45%

LithuaniaHQS

generation in TWh

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153

2007 2015 2020 2030

Coal 0 0 0 0Lignite 0 0 0 0Gas 2 2 2 2Oil 0 1 1 1Nuclear 9 9 9 6Large Hydro 1 1 1 1Small-scale Hydro 0 0 0 0Pumped Storage* -1 -1 -1 -1Other non-renewables 0 0 0 0Wind Onshore 0 0 1 1Wind Offshore 0 0 0 0Biomass 0 0 0 0Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -1 2 4 7Windreduction 0 0 0 0

Sum 11 14 17 17

RES-E Share 4% 4% 6% 6%

LithuaniaBAU

generation in TWh

2007 2015 2020 2030

Coal 0 0 0 0Lignite 0 0 0 0Gas 2 2 2 2Oil 0 1 1 1Nuclear 9 9 9 5Large Hydro 1 1 1 1Small-scale Hydro 0 0 0 0Pumped Storage* -1 -1 -1 -1Other non-renewables 0 0 0 0Wind Onshore 0 0 1 1Wind Offshore 0 0 0 0Biomass 0 0 0 0Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -1 2 4 8Windreduction 0 0 0 0

Sum 11 14 17 17

RES-E Share 4% 4% 6% 6%

Lithuania Cluster

generation in TWh

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154

2007 2015 2020 2030

Coal 0 0 1 2Lignite 0 0 0 0Gas 3 0 1 0Oil 0 0 0 0Nuclear 0 0 0 0Large Hydro 1 0 0 0Small-scale Hydro 0 0 0 0Pumped Storage* -1 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 1 1 1Wind Offshore 0 0 0 0Biomass 0 0 0 1Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 4 5 4 3Windreduction 0 0 0 0

Sum 7 7 7 7

RES-E Share 4% 19% 21% 23%

LuxembourgHQS

generation in TWh

2007 2015 2020 2030

Coal 0 0 0 3Lignite 0 0 0 0Gas 3 1 1 0Oil 0 0 0 0Nuclear 0 0 0 0Large Hydro 1 0 0 0Small-scale Hydro 0 0 0 0Pumped Storage* -1 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 0 0 0Wind Offshore 0 0 0 0Biomass 0 0 0 0Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 4 5 5 4Windreduction 0 0 0 0

Sum 7 7 8 8

RES-E Share 4% 8% 8% 13%

LuxembourgBAU

generation in TWh

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155

2007 2015 2020 2030

Coal 0 0 0 3Lignite 0 0 0 0Gas 3 1 1 0Oil 0 0 0 0Nuclear 0 0 0 0Large Hydro 1 0 0 0Small-scale Hydro 0 0 0 0Pumped Storage* -1 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 0 0 0Wind Offshore 0 0 0 0Biomass 0 0 0 0Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 4 5 5 3Windreduction 0 0 0 0

Sum 7 7 8 8

RES-E Share 4% 8% 8% 13%

Luxembourg Cluster

generation in TWh

2007 2015 2020 2030

Coal 0 0 0 0Lignite 0 0 0 0Gas 0 0 0 0Oil 2 2 2 1Nuclear 0 0 0 0Large Hydro 0 0 0 0Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 0 0 0Wind Offshore 0 0 0 0Biomass 0 0 0 0Photovoltaics 0 0 0 1Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 0 0 0 0Windreduction 0 0 0 0

Sum 2 2 2 2

RES-E Share 0% 9% 8% 63%

Malta HQS

generation in TWh

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156

2007 2015 2020 2030

Coal 0 0 0 0Lignite 0 0 0 0Gas 0 0 0 0Oil 2 2 2 2Nuclear 0 0 0 0Large Hydro 0 0 0 0Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 0 0 0Wind Offshore 0 0 0 0Biomass 0 0 0 0Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 0 0 0 0Windreduction 0 0 0 0

Sum 2 2 2 2

RES-E Share 0% 2% 8% 9%

MaltaBAU

generation in TWh

2007 2015 2020 2030

Coal 0 0 0 0Lignite 0 0 0 0Gas 0 0 0 0Oil 2 2 2 2Nuclear 0 0 0 0Large Hydro 0 0 0 0Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 0 0 0Wind Offshore 0 0 0 0Biomass 0 0 0 0Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 0 0 0 0Windreduction 0 0 0 0

Sum 2 2 2 2

RES-E Share 0% 2% 8% 9%

Malta Cluster

generation in TWh

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2007 2015 2020 2030

Coal 24 17 16 6Lignite 0 0 0 0Gas 60 59 61 59Oil 2 0 0 0Nuclear 4 3 3 2Large Hydro 0 0 0 0Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 1 1 1 1Wind Onshore 3 9 11 13Wind Offshore 0 9 25 78Biomass 5 11 11 11Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 18 16 -4 -35Windreduction 0 -1 -2 -12

Sum 118 125 124 124

RES-E Share 7% 23% 38% 79%

NetherlandsHQS

generation in TWh

2007 2015 2020 2030

Coal 24 19 18 6Lignite 0 0 0 0Gas 60 59 60 60Oil 2 0 0 0Nuclear 4 3 3 2Large Hydro 0 0 0 0Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 3 1 1 1Wind Onshore 3 5 11 13Wind Offshore 0 11 27 78Biomass 5 5 5 3Photovoltaics 0 4 6 10Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 18 18 -6 -39Windreduction 0 0 -1 -12

Sum 120 125 124 124

RES-E Share 7% 19% 38% 81%

NetherlandsBAU

generation in TWh

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2007 2015 2020 2030

Coal 24 19 18 7Lignite 0 0 0 0Gas 60 58 61 60Oil 2 0 0 0Nuclear 4 3 3 2Large Hydro 0 0 0 0Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 3 1 1 1Wind Onshore 3 5 11 13Wind Offshore 0 11 27 78Biomass 5 5 5 3Photovoltaics 0 4 6 10Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 18 18 -7 -40Windreduction 0 0 -1 -12

Sum 120 125 124 124

RES-E Share 7% 19% 38% 81%

Netherlands Cluster

generation in TWh

2007 2015 2020 2030

Coal 0 0 0 0Lignite 0 0 0 0Gas 1 1 1 1Oil 0 0 0 0Nuclear 0 0 0 0Large Hydro 129 116 116 116Small-scale Hydro 5 6 6 6Pumped Storage* -2 0 0 0Other non-renewables 0 0 0 0Wind Onshore 1 7 7 7Wind Offshore 0 8 8 8Biomass 0 1 1 0Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -10 -13 -11 -11Windreduction 0 0 0 0

Sum 125 125 127 127

RES-E Share 105% 105% 103% 103%

NorwayHQS

generation in TWh

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2007 2015 2020 2030

Coal 0 0 0 0Lignite 0 0 0 0Gas 1 1 1 1Oil 0 0 0 0Nuclear 0 0 0 0Large Hydro 129 116 116 116Small-scale Hydro 5 6 6 6Pumped Storage* -2 0 0 0Other non-renewables 0 0 0 0Wind Onshore 1 1 6 7Wind Offshore 0 0 0 0Biomass 0 0 0 0Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -10 2 -2 -2Windreduction 0 0 0 0

Sum 125 125 127 127

RES-E Share 105% 94% 96% 97%

NorwayBAU

generation in TWh

2007 2015 2020 2030

Coal 0 0 0 0Lignite 0 0 0 0Gas 1 1 1 1Oil 0 0 0 0Nuclear 0 0 0 0Large Hydro 129 116 116 116Small-scale Hydro 5 6 6 6Pumped Storage* -2 0 0 0Other non-renewables 0 0 0 0Wind Onshore 1 1 6 7Wind Offshore 0 0 0 0Biomass 0 0 0 0Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -10 2 -2 -2Windreduction 0 0 0 0

Sum 125 125 127 127

RES-E Share 105% 94% 96% 97%

Norway Cluster

generation in TWh

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2007 2015 2020 2030

Coal 83 31 30 20Lignite 50 61 62 49Gas 5 7 7 7Oil 2 0 0 0Nuclear 0 0 0 0Large Hydro 2 3 4 5Small-scale Hydro 1 1 1 1Pumped Storage* -1 -3 -4 -5Other non-renewables 0 0 0 0Wind Onshore 1 25 48 82Wind Offshore 0 0 0 0Biomass 2 22 23 27Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -5 0 -6 -11Windreduction 0 0 -3 -13

Sum 139 148 163 163

RES-E Share 3% 31% 42% 64%

PolandHQS

generation in TWh

2007 2015 2020 2030

Coal 83 56 44 20Lignite 50 64 70 74Gas 5 7 7 7Oil 2 0 0 0Nuclear 0 0 9 17Large Hydro 2 1 2 3Small-scale Hydro 1 1 1 1Pumped Storage* -1 0 -1 -3Other non-renewables 1 0 0 0Wind Onshore 1 4 14 26Wind Offshore 0 0 0 0Biomass 2 14 14 17Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -5 -1 2 0Windreduction 0 0 0 0

Sum 139 148 163 163

RES-E Share 3% 13% 17% 25%

PolandBAU

generation in TWh

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2007 2015 2020 2030

Coal 83 41 33 20Lignite 50 64 72 70Gas 5 7 7 7Oil 2 0 0 0Nuclear 0 0 0 0Large Hydro 2 2 4 4Small-scale Hydro 1 1 1 1Pumped Storage* -1 -1 -3 -4Other non-renewables 1 0 0 0Wind Onshore 1 21 44 65Wind Offshore 0 0 0 0Biomass 2 19 20 17Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -5 -8 -14 -13Windreduction 0 0 -2 -5

Sum 139 148 163 163

RES-E Share 3% 27% 38% 48%

Poland Cluster

generation in TWh

2007 2015 2020 2030

Coal 12 27 30 20Lignite 0 0 0 0Gas 13 11 4 3Oil 5 2 2 2Nuclear 0 0 0 0Large Hydro 10 12 12 13Small-scale Hydro 1 1 1 1Pumped Storage* -1 0 -1 -1Other non-renewables 0 0 0 0Wind Onshore 4 4 9 11Wind Offshore 0 0 0 3Biomass 2 4 4 4Photovoltaics 0 0 0 4Concentrating Solar 0 3 6 6Geothermal 0 1 1 1Tidal 0 0 0 0Wave 0 0 0 0Net Import 7 0 0 4Windreduction 0 0 0 0

Sum 53 65 70 70

RES-E Share 30% 38% 46% 58%

PortugalHQS

generation in TWh

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2007 2015 2020 2030

Coal 12 24 23 16Lignite 0 0 0 0Gas 13 8 6 6Oil 5 2 2 2Nuclear 0 0 0 0Large Hydro 10 12 13 13Small-scale Hydro 1 1 1 1Pumped Storage* -1 -1 -2 -2Other non-renewables 0 0 0 0Wind Onshore 4 4 4 0Wind Offshore 0 0 0 0Biomass 2 4 4 2Photovoltaics 0 12 21 31Concentrating Solar 0 3 6 6Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 2Net Import 7 -5 -9 -5Windreduction 0 0 0 0

Sum 53 65 71 73

RES-E Share 30% 54% 68% 76%

PortugalBAU

generation in TWh

2007 2015 2020 2030

Coal 12 24 23 16Lignite 0 0 0 0Gas 13 8 7 6Oil 5 2 2 2Nuclear 0 0 0 0Large Hydro 10 12 13 13Small-scale Hydro 1 1 1 1Pumped Storage* -1 -1 -2 -2Other non-renewables 0 0 0 0Wind Onshore 4 4 4 0Wind Offshore 0 0 0 0Biomass 2 4 4 2Photovoltaics 0 12 21 31Concentrating Solar 0 3 6 6Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 2Net Import 7 -4 -9 -5Windreduction 0 0 0 0

Sum 53 65 71 73

RES-E Share 30% 54% 68% 76%

Portugal Cluster

generation in TWh

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2007 2015 2020 2030

Coal 2 3 4 2Lignite 21 18 18 16Gas 11 6 6 6Oil 1 1 1 1Nuclear 6 5 13 13Large Hydro 15 16 16 16Small-scale Hydro 1 1 1 1Pumped Storage* 0 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 1 3 3Wind Offshore 0 0 0 0Biomass 0 10 11 12Photovoltaics 0 0 0 3Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -2 5 4 3Windreduction 0 0 0 0

Sum 54 66 76 76

RES-E Share 26% 42% 40% 46%

RomaniaHQS

generation in TWh

2007 2015 2020 2030

Coal 2 4 4 2Lignite 21 18 18 20Gas 11 6 6 6Oil 1 1 1 1Nuclear 6 5 6 7Large Hydro 15 16 16 16Small-scale Hydro 1 1 1 1Pumped Storage* 0 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 1 3 3Wind Offshore 0 0 0 0Biomass 0 9 12 12Photovoltaics 0 0 4 9Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -2 5 6 -1Windreduction 0 0 0 0

Sum 54 66 76 76

RES-E Share 26% 41% 46% 53%

Romania BAU

generation in TWh

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2007 2015 2020 2030

Coal 2 4 3 2Lignite 21 18 18 20Gas 11 6 6 6Oil 1 1 1 1Nuclear 6 5 16 27Large Hydro 15 16 16 16Small-scale Hydro 1 1 1 1Pumped Storage* 0 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 1 1 1Wind Offshore 0 0 0 0Biomass 0 9 9 3Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -2 5 4 0Windreduction 0 0 0 0

Sum 54 66 76 76

RES-E Share 26% 40% 35% 27%

Romania Cluster

generation in TWh

2007 2015 2020 2030

Coal 3 2 2 2Lignite 2 2 3 3Gas 2 6 6 6Oil 1 0 0 0Nuclear 14 15 15 12Large Hydro 4 5 5 5Small-scale Hydro 0 0 0 0Pumped Storage* 0 -1 -1 -1Other non-renewables 0 0 0 0Wind Onshore 0 3 3 3Wind Offshore 0 0 0 0Biomass 0 2 3 3Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 2 -4 0 2Windreduction 0 0 0 0

Sum 27 32 37 37

RES-E Share 15% 31% 27% 29%

SlovakiaHQS

generation in TWh

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2007 2015 2020 2030

Coal 3 2 2 2Lignite 2 2 3 3Gas 2 6 6 6Oil 1 0 0 0Nuclear 14 15 15 6Large Hydro 4 5 5 5Small-scale Hydro 0 0 0 0Pumped Storage* 0 -1 -2 -1Other non-renewables 0 0 0 0Wind Onshore 0 0 4 4Wind Offshore 0 0 0 0Biomass 0 2 3 4Photovoltaics 0 0 6 13Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 2 0 -5 -4Windreduction 0 0 0 0

Sum 27 32 37 38

RES-E Share 15% 19% 43% 64%

Slovakia BAU

generation in TWh

2007 2015 2020 2030

Coal 3 2 2 2Lignite 2 2 3 3Gas 2 6 6 6Oil 1 0 0 0Nuclear 14 15 15 6Large Hydro 4 5 5 5Small-scale Hydro 0 0 0 0Pumped Storage* 0 -1 -1 -1Other non-renewables 0 0 0 0Wind Onshore 0 0 4 4Wind Offshore 0 0 0 0Biomass 0 2 3 4Photovoltaics 0 0 6 13Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 2 0 -5 -4Windreduction 0 0 0 0

Sum 27 32 37 37

RES-E Share 15% 19% 43% 64%

Slovakia Cluster

generation in TWh

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2007 2015 2020 2030

Coal 0 0 0 0Lignite 4 3 4 5Gas 0 0 0 0Oil 0 0 0 0Nuclear 5 5 16 12Large Hydro 3 3 3 3Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 0 0 0Wind Offshore 0 0 0 0Biomass 0 1 1 1Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 0 3 -8 -4Windreduction 0 0 0 0

Sum 14 16 18 18

RES-E Share 22% 30% 28% 28%

SloveniaHQS

generation in TWh

2007 2015 2020 2030

Coal 0 0 0 0Lignite 4 3 4 5Gas 0 0 0 0Oil 0 0 0 0Nuclear 5 5 9 8Large Hydro 3 3 3 3Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 0 0 0Wind Offshore 0 0 0 0Biomass 0 1 1 1Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 0 3 0 -1Windreduction 0 0 0 0

Sum 14 16 18 18

RES-E Share 22% 28% 26% 26%

SloveniaBAU

generation in TWh

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2007 2015 2020 2030

Coal 0 0 0 0Lignite 4 3 4 5Gas 0 0 0 0Oil 0 0 0 0Nuclear 5 5 8 9Large Hydro 3 3 3 3Small-scale Hydro 0 0 0 0Pumped Storage* 0 0 0 0Other non-renewables 0 0 0 0Wind Onshore 0 0 0 0Wind Offshore 0 0 0 0Biomass 0 1 1 1Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 0 3 0 -1Windreduction 0 0 0 0

Sum 14 16 18 18

RES-E Share 22% 28% 26% 26%

Slovenia Cluster

generation in TWh

2007 2015 2020 2030

Coal 66 75 78 46Lignite 4 7 3 0Gas 90 70 58 38Oil 18 7 7 7Nuclear 53 56 55 47Large Hydro 26 25 27 28Small-scale Hydro 4 5 5 5Pumped Storage* -4 0 -2 -5Other non-renewables 0 0 0 0Wind Onshore 27 34 47 57Wind Offshore 0 0 0 5Biomass 3 24 42 38Photovoltaics 1 1 1 7Concentrating Solar 0 5 16 53Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -6 17 13 24Windreduction 0 0 0 -4

Sum 281 327 349 349

RES-E Share 20% 28% 38% 53%

generation in TWhSpainHQS

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2007 2015 2020 2030

Coal 66 76 79 60Lignite 4 7 3 0Gas 90 68 56 34Oil 18 7 7 7Nuclear 53 56 55 50Large Hydro 26 25 26 28Small-scale Hydro 4 5 5 5Pumped Storage* -4 0 -2 -4Other non-renewables 1 0 0 0Wind Onshore 27 28 34 42Wind Offshore 0 0 5 6Biomass 3 24 42 59Photovoltaics 1 7 10 15Concentrating Solar 0 5 8 13Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -6 19 21 34Windreduction 0 0 0 -1

Sum 282 327 349 349

RES-E Share 20% 28% 36% 46%

generation in TWhSpainBAU

2007 2015 2020 2030

Coal 66 77 79 60Lignite 4 7 3 0Gas 90 68 57 35Oil 18 7 7 7Nuclear 53 56 55 50Large Hydro 26 25 26 28Small-scale Hydro 4 5 5 5Pumped Storage* -4 0 -2 -4Other non-renewables 1 0 0 0Wind Onshore 27 28 34 42Wind Offshore 0 0 5 6Biomass 3 24 42 59Photovoltaics 1 7 10 15Concentrating Solar 0 5 8 13Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -6 18 20 34Windreduction 0 0 0 -1

Sum 282 327 349 349

RES-E Share 20% 28% 36% 46%

generation in TWhSpainCluster

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2007 2015 2020 2030

Coal 1 1 1 1Lignite 0 0 0 0Gas 1 2 2 2Oil 1 1 1 1Nuclear 64 70 70 49Large Hydro 62 62 63 63Small-scale Hydro 4 3 3 3Pumped Storage* 0 -1 -2 -3Other non-renewables 1 1 1 1Wind Onshore 1 4 11 13Wind Offshore 0 0 0 0Biomass 10 4 4 4Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 1 12 4 23Windreduction 0 0 0 0

Sum 147 159 158 158

RES-E Share 51% 45% 49% 51%

Sweden HQS

generation in TWh

2007 2015 2020 2030

Coal 1 1 1 1Lignite 0 0 0 0Gas 1 2 2 2Oil 1 1 1 1Nuclear 64 70 70 49Large Hydro 62 62 63 63Small-scale Hydro 4 3 3 3Pumped Storage* 0 -1 -2 -2Other non-renewables 1 1 1 1Wind Onshore 1 12 14 14Wind Offshore 0 6 11 17Biomass 10 15 15 9Photovoltaics 0 0 0 5Concentrating Solar 0 0 0 0Geothermal 0 0 0 10Tidal 0 0 0 0Wave 0 0 0 0Net Import 1 -12 -21 -14Windreduction 0 0 0 0

Sum 147 159 158 158

RES-E Share 51% 60% 65% 74%

SwedenBAU

generation in TWh

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2007 2015 2020 2030

Coal 1 1 1 1Lignite 0 0 0 0Gas 1 2 2 2Oil 1 1 1 1Nuclear 64 70 70 49Large Hydro 62 62 63 63Small-scale Hydro 4 3 3 3Pumped Storage* 0 -1 -2 -1Other non-renewables 1 1 1 1Wind Onshore 1 5 5 5Wind Offshore 0 0 0 0Biomass 10 4 4 2Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 1 11 9 33Windreduction 0 0 0 0

Sum 147 159 158 158

RES-E Share 51% 45% 46% 45%

SwedenCluster

generation in TWh

2007 2015 2020 2030

Coal 0 0 0 0Lignite 0 0 0 0Gas 1 0 0 0Oil 0 0 0 0Nuclear 26 16 31 28Large Hydro 33 31 31 32Small-scale Hydro 3 5 5 5Pumped Storage* -2 -2 -3 -4Other non-renewables 0 0 0 0Wind Onshore 0 0 0 0Wind Offshore 0 0 0 0Biomass 2 4 5 5Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import -2 7 -6 -4Windreduction 0 0 0 0

Sum 61 62 63 63

RES-E Share 56% 60% 60% 60%

generation in TWhSwitzerlandHQS

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2007 2015 2020 2030

Coal 0 0 0 0Lignite 0 0 0 0Gas 1 0 0 0Oil 0 0 0 0Nuclear 26 16 26 29Large Hydro 33 30 31 31Small-scale Hydro 3 3 3 3Pumped Storage* -2 -1 -1 -2Other non-renewables 1 0 0 0Wind Onshore 0 0 0 0Wind Offshore 0 0 0 0Biomass 2 4 3 3Photovoltaics 0 1 1 0Concentrating Solar 0 0 0 0Geothermal 0 0 7 7Tidal 0 0 0 0Wave 0 0 0 0Net Import -2 9 -7 -9Windreduction 0 0 0 0

Sum 63 62 63 63

RES-E Share 56% 58% 67% 66%

generation in TWhSwitzerlandBAU

2007 2015 2020 2030

Coal 0 0 0 0Lignite 0 0 0 0Gas 1 0 0 0Oil 0 0 0 0Nuclear 26 16 26 31Large Hydro 33 30 31 31Small-scale Hydro 3 3 3 3Pumped Storage* -2 -1 -1 -2Other non-renewables 1 0 0 0Wind Onshore 0 0 0 0Wind Offshore 0 0 0 0Biomass 2 4 3 3Photovoltaics 0 1 1 0Concentrating Solar 0 0 0 0Geothermal 0 0 7 7Tidal 0 0 0 0Wave 0 0 0 0Net Import -2 9 -6 -10Windreduction 0 0 0 0

Sum 63 62 63 63

RES-E Share 56% 58% 67% 66%

generation in TWhSwitzerlandCluster

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2007 2015 2020 2030

Coal 132 157 117 55Lignite 0 0 0 0Gas 160 35 43 46Oil 5 1 1 1Nuclear 57 78 85 35Large Hydro 8 6 8 10Small-scale Hydro 1 0 0 0Pumped Storage* -5 -2 -6 -7Other non-renewables 3 3 3 3Wind Onshore 5 42 70 107Wind Offshore 0 16 38 128Biomass 10 27 28 23Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 5 15 8 15Windreduction 0 0 0 -19

Sum 380 378 396 396

RES-E Share 6% 23% 34% 64%

generation in TWhUnited KingdomHQS

2007 2015 2020 2030

Coal 132 167 134 78Lignite 0 0 0 0Gas 160 47 41 49Oil 5 1 1 1Nuclear 57 78 92 74Large Hydro 8 5 8 9Small-scale Hydro 1 0 0 0Pumped Storage* -5 -1 -5 -6Other non-renewables 8 3 3 3Wind Onshore 5 43 69 106Wind Offshore 0 3 25 51Biomass 10 20 20 14Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 5 12 8 20Windreduction 0 0 0 -3

Sum 385 378 396 396

RES-E Share 6% 18% 29% 43%

generation in TWhUnited KingdomBAU

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2007 2015 2020 2030

Coal 132 163 139 88Lignite 0 0 0 0Gas 160 42 39 46Oil 5 1 1 1Nuclear 57 78 82 36Large Hydro 8 5 8 9Small-scale Hydro 1 0 0 0Pumped Storage* -5 -1 -5 -7Other non-renewables 8 3 3 3Wind Onshore 5 42 68 107Wind Offshore 0 10 30 84Biomass 10 25 23 17Photovoltaics 0 0 0 0Concentrating Solar 0 0 0 0Geothermal 0 0 0 0Tidal 0 0 0 0Wave 0 0 0 0Net Import 5 10 8 19Windreduction 0 0 0 -8

Sum 385 378 396 396

RES-E Share 6% 21% 31% 52%

generation in TWhUnited KingdomCluster

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B. Case Studies The following chapter illustrates the diversity of the designs of different RES-E

promotion systems currently existing in EU27++. As already stated in chapter 3,

current promotion systems are in most cases modifications of the pure promotion

systems described in chapter 3. The case studies of the promotion system in UK and

Sweden demonstrate how diverse quota systems can be designed. The case study

of Germany serves as an example for a feed-in-tariff system while the case study of

Spain shows the example of a combined feed-in-tariff and premium system.

B.1 Case Study United Kingdom

The UK´s RES-E promotion system is often taken as an example for the quota

system. It is characterized by several modifications of a basic quota system, i.e. the

banding which was introduced in April 2009. This case study thus permits an

illustration of a quota system incorporating several of the characteristics discussed in

Chapter 3.

The British quota system has been introduced in 2002 and was last modified by the

Renewables Obligation Order 2009. Before, RES-E in the UK have been supported

by the so-called Non Fossil Fuels Obligation (NFFO), which was enacted in 1990 by

the Electricity Act. It established a regular tendering procedure for electricity

generation capacities on the basis of renewable energies. In Scotland and Northern

Ireland, there were similar promotion policies in force (Scottish Renewables

Obligation (SRO) and NI-NFFO in the case of Northern Ireland). Within these

tendering schemes, 933 projects with a total capacity of 3,638 MW were assigned for

promotion. Yet, the described tendering scheme is considered to have failed because

not even one third of the assigned projects´ total capacity was realized in the end

(449 projects with a total of 1,209 MW installed capacity)54.

In 2002 England and Wales (Renewables Obligation Order) as well as Scotland

(Renewables Obligation (Scotland) Order) switched their promotion scheme to a

54 BERR (2007), p. 20, for further details and discussions of the UK tendering system, see Agnolucci, P(2006).

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quota system. Northern Ireland followed in 2005 (Renewables Obligation Order

(Northern Ireland)).

Characteristics of the UK quota system

In the UK, the suppliers of electricity are committed to source a part of their electricity

from renewable sources. The obligation was designed with a yearly increasing target

which rose from an initial 3% in the obligation period 2002-2003 up to 9.1% in the

previous period 2008-2009.55 In Northern Ireland, starting 2005-2006 at 2.5%, the

obligation level was 2.6% in 2006-2007 and 3% in 2008-2009.56

From April 2009 the obligation changed from a percentage obligation to an obligation

to present a certain number of Renewable Obligation Certificates (ROCs). This

change was necessary due to the introduction of the banding in the RO 2009. Before

April 2009, one Renewable Obligation Certificate (ROC) accounted for 1 MWh,

regardless of the RES-E technology by which the renewable energy was produced.

Thus, before 2009, the suppliers were indifferent from which RES-E plant their ROCs

came. Since the introduction of the banding, one ROC can now also account for

more or less than 1 MWh, depending on the different RES-E technologies. While for

example wind onshore still accounts for 1 MWh, wave and solar photovoltaics

account for ½ MWh and electricity generated from landfill gas for 4 MWh.57 Under a

percentage obligation, suppliers would therefore try to fulfill their obligation by ROCs

which account for a higher number of MWh. The target of a banding, to support also

more expensive RES-E technologies, would thus be counteracted by a percentage

obligation. However, the determination of the number of ROCs the suppliers have to

present per MWh of electricity sold, also poses challenges. A reference is constituted

by Schedule 1 in RO (2009) which states that the number of ROCs required per

MWh of electricity supplied in Great Britain is 0.097 in the current obligation period

2009-2010 and will increase up to 0.154 in the period 2015-2016 where it will stay

until 2026-2027. For 1 MWh of electricity supplied in Northern Ireland, currently 0.035

55 RO (2006), Schedule 1. 56 NIRO (2005). 57 See RO (2009), Schedule 2, Part 2 and note also that the amount of electricity to be stated in ROCs remains at 1 MWh for power from most RES-E plants which were accredited as at 11th July 2006 (see RO (2009) Schedule 2, Part 3).

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ROCs are required. This obligation will mount to 0.063 ROCs in 2012-2013 and

remain at this level until 2026-2027. Still, in order to pursue target achievement (the

RES-E target being defined as a percentage of electricity consumption and not as a

certain number of certificates produced), the exact number of ROCs required per

MWh results from calculation A, B, and C, presented in the following.58

Calculation A:

Before the start of each obligation period, the total amount of electricity likely to be

supplied to customers in Great Britain and Ireland has to be estimated by the

Secretary of State. This estimated total electricity supply is then multiplied by the

obligation for this period (corresponding to the figures in Schedule 1 from RO

(2009)). As an example, the expected overall consumption of 100,000 MWh of

electricity combined with a 0.12 ROC per MWh-obligation would lead to a total

obligation of 12,000 ROCs. Thus, calculation A correctly delivers the required

number of ROCs if one certificate equals exactly 1 MWh. On the contrary, if suppliers

would purchase all ROCs from i.e. wave and photovoltaics power accounting for ½

MWh, the total amount of RES-E would be bisected. To take the different MWh-

values of the RES-E technologies into account, calculation B is needed.

Calculation B:

For calculation B, the total amount of renewable electricity likely to be supplied to

customers in Great Britain and Ireland has to be estimated. Furthermore it has to be

estimated, which amount of RES-E will be contributed by which RES-E technology in

order to calculate how many ROCs are likely to be issued in the obligation period.

Then, this estimated number of ROCs is increased by 8% (the so-called headroom).

The head-room serves as a kind of safety margin in order to allow for a higher

electricity supply by weather dependent technologies without admitting

overcompliance of the quota and therefore a deterioration of the ROC prices.

Thereby the headroom enhances the investment climate and contributes to a better

performance of the support system in terms of stimulation.

58 For the first period of the new RO (2009-2010), the ROC-obligation is equal to the number stated in Schedule 1 (RO 2009), without further calculations. (DECC (2008), p.28).

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In the above example, the expected generation of 10,000 MWh by means of onshore

wind turbines (1 ROC per MWh) and 3,000 MWh out of dedicated energy crops (2

ROCs per MWh) would generate 10,000*1 + 3,000*2 = 16,000 certificates. Given an

8%-headroom, this figure would then be increased by multiplying it with 1.08. Thus,

the outcome of Calculation B in the example would be at 17,280 ROCs or 17.28

ROCs per 100 MWh.

Calculation C:

Thirdly, calculation C leads to the maximum upper limit of the obligation level (C), as

well expressed in ROCs per 100 MWh, by multiplying the expected electricity

consumption by 20%. In our example, this figure would be 20,000 ROCs or 20 ROCs

per 100 MWh.

The obligation of ROCs per MWh of electricity sold depend finally on a comparison of

the results of A, B and C: If (A) is greater than (B), (A) is set as ROC obligation. If (B)

is greater than (A) but less than (C), (B) is taken as ROC obligation. Ultimately, if (B)

is the greatest of the three, (C) will be the ROC obligation. In the above example, the

following figures were computed:

= 12,000 ROCs

= 17,280 ROCs

= 20,000 ROCs

Obviously, (B) is greater than (A) and less than (C) so (B) is taken as the quota

obligation. Every electricity supplier in the example would thus be committed to

present 17,28 ROCs per 100 MWh or to pay the buy-out price in the case of

underfulfilment.

Buy-out and ROC prices

If a supplier does not present the sufficient number of ROCs to meet the obligation, a

buy-out price has to be paid for every missing ROC into the buy-out fund. This buy-

out price is calculated each year by adjustment to reflect changes in the Retail prices

Index. In 2002, the buy-out price was set at 30 £ per MWh while in the period 2008-

2009 35.76 £ per MWh had to be paid.59

59 OFGEM (2008).

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In an “ordinary” quota system, the abovementioned buy-out price would

simultaneously be the upper limit of the ROC price. The British system, however, has

a specialty which permits a higher certificate price than the buy-out price. At the end

of each obligation period, the buy-out fund, i.e. the aggregate of all the penalty

payments of the expired obligation period, is paid back proportionally to all those

suppliers that have presented ROCs (this is called the “recycle payment”). Therefore,

in the British configuration of a quota system, the value of a ROC for an obligated

party equals the buy-out price that would have to be paid in the case of non-

compliance plus the expected recycle payment at the end of the obligation period. As

there is no official market price determined, it is possible that different producers

negotiate different ROC prices, but the only reasonable value to take for the market

price is the ROC value described above. It has to be noted that this is only true as

long as the quota obligation exceeds the number of ROCs produced. Since only in

this case a recycle payment can be expected, only in this case it is worthwhile for the

supplier to pay more than the buy-out price per ROC. At least in the medium term it

can be considered as certain that the quota obligation will be higher than the effective

RES-E generation because of the headroom mechanism explained above. The

described design hence provides for a self-adapting ROC price, i.e. the lower the

expected quota fulfillment, the higher the ROC value and thus the incentive for RES-

E producers to enter the market. So on the one side, the buy-out fund and the

associated recycle payment is an additional incentive to present ROCs, but on the

other side it introduces an additional uncertainty into the market of certificates which

has evoked a broad supply of ROC price predictions.

Market outcomes

As the banding was only introduced in April 2009, data describing the performance of

the British RES-E support system is only available for the period of technology-

neutral RES-E support. The consequences of the quota system in which one ROC

was equal to one MWh, can be seen in Figure B-1: The cheapest technologies have

expanded first, whereas more expensive technologies have only been able to

capture larger market shares with a rising quota (displayed as “Total Obligation” in

Figure B-1 and representing the respective amount of electricity to be generated out

of RES in order to fulfill the quota).

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Figure B-1: Electricity generation from RES and quota fulfillment in the British System

Electricity generation from RES and quota fulfillment in the British system

0

5.000

10.000

15.000

20.000

25.000

30.000

2002

-03

2003

-04

2004

-05

2005

-06

2006

-07

2007

-08

elec

trici

ty g

ener

atio

n [G

Wh]

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

70,00%

80,00%

90,00%

Total ObligationWaveSewage gasPVOff-shore windBiomassHydroCo-firingLandfill gasOn-shore windACT*quota fulfilment

Source: EWI based on data from OFGEM (2009). It can be observed for example that a notable expansion of onshore wind energy

started only in the 2005/2006 obligation period when the utilization of landfill gas and

the exploitation of co-firing possibilities had already been far advanced.

With respect to the ROC market price, the buy-out price and the recycle payments

out of the buy-out fund play the lead (the latter depend on the degree of the quota

fulfillment). For the quota has always been set high enough to avoid overfulfillment

and hence a deterioration of the ROC value, the buy-out price has hitherto been

constituting a bottom line for the ROCs´ market price and it is likely to do so further

on. The recycle payments are then added to the buy-out price in order to calculate

the ROC-value. As there is no official market price ascertained, this value can be

taken as the ROC market price. Thus, in a well functioning market, producers are

able to estimate the level of quota fulfillment and the resulting proportion of the

recycle payments they will get out of the buy-out fund to calculate the ROC-value.

The market price should therefore be close to the ROC-value. And since the recycle

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payments are the higher the more obligated parties pay the buy-out price instead of

presenting certificates, the ROC-value increases with a decreasing quota fulfillment

and vice versa, as shown in Figure B-2.

Figure B-2: Remuneration and Quota fulfillment in the British System

Source: EWI based on data from OFGEM (2009).

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B.2 Case Study Sweden

Another system that is often cited as an example for a quota system is the Swedish

one. It does not comprise a technology-specific support like the British system, but it

has its own properties explained in the following.60 It started May 1st 2003 and lasts

until 2030.61 The original objective was to increase RES-E generation by 10 TWh

until 2010, relative to the corresponding production level in 2002. In 2007 the

objective has been adjusted and is now to increase the level by 17 TWh until 2016,

relative to the production in 2002. One important characteristic of the Swedish quota

system is, that it supports also electricity production from peat.

Electricity producers receive one TGC for each MWh if they meet the requirements of

the Electricity Certificates Act. In order to foster the construction of new plants and

limit the overall cost for the electricity consumers, there have been established some

restrictions to the allocation of TGCs. Plants that were connected to the grid since the

start of the quota system receive TGCs for 15 years but at the latest until

2030.Through this support, these RES-E plants are expected to be competitive (also

after the expiration of the 15 years). Plants commissioned prior to system

establishment in 2003, however, receive TGCs for a shorter period of time, normally

until the end of 2012, except for those plants which received a public investment

grant after 15th February 1998. These will receive TGCs until the end of 2014.

In the Swedish system, quota obligated parties are electricity suppliers, electricity

intensive companies and self-generating electricity consumers, imported or bought

on the Nordic power exchange. Quota-obliged parties have to present an annual

return to the Swedish Energy Agency with detailed data about the amount of

electricity sold during the previous year and the TGCs that correspond to the

respective quota (proportion of their sold electricity). If the obligated companies do

not fulfil the required quota, the penalty fee for each missing TGC is 150% of the last

period’s average TGC price. Table B-1 provides an overview of the quotas set by the

government for each year from 2003 until 2030. The quota is increasing each year

until 2012 to create the corresponding demand for TGCs. In 2012 however, most of

the abovementioned RES-E plants commissioned before 2003 will be phased out of 60 Swedish Energy Agency (2008). 61 A proposal for a prolonged TGC system until 2035 is currently in the swedish legislation process. A new quota curve is proposed in order to reach the ambition to increase electricity production of RES-E to 25 TWh in 2025 (see Swedish Energy Agency (2009)).

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the system. As a consequence, fewer certificates will be distributed. To avoid an

imbalance between demand and supply of TGCs which causes extreme price

increases and high costs for end consumers, the government has decided to reduce

the quota in 2013 and then raise it again slightly until 2020. The reduction of the

quota after 2020 is due to the fact that further producers of RES-E that reach the 15

years of receiving TGCs will phase out of the system between 2020 and 2030.

Table B-1: Quotas for the period 2003-2030, forecast new renewable electricity production capacity and actual renewable electricity production62

Year Quota (%)Forecast of new

renewable electricity [TWh]

2003 7.4% 0.642004 8.1% 1.352005 10.4% 3.652006 12.6% 5.892007 15.1% 8.962008 16.3% 10.32009 17,0% 11.152010 17.9% 12.222011 17.9% 11.762012 17.9% 12.362013 8.9% 12.962014 9.4% 13.562015 9.7% 15.552016 11.1% 17.022017 11.1% 17.112018 11.1% 17.22019 11.2% 17.292020 11.2% 17.382021 11.3% 17.472022 10.6% 17.562023 9.4% 17.652024 9,0% 17.742025 8.3% 17.832026 7.5% 17.922027 6.7% 18.012028 5.9% 18.12029 5,0% 18.22030 4.2% 18.29

Source: Swedish Energy Agency (2008). 62 Note again that a proposal for a new quota curve is currently in the swedish legislation process. (see Swedish Energy Agency (2009)).

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As the production from the phased-out plants is supposed to continue outside the

quota system, the overall RES-E production is expected to increase constantly.

So far, the Swedish RES-E promotion system is very close to a “pure” quota system

described in chapter 3 and should have the explained effects on the assessment

criteria for public support schemes: from a static perspective, the efficiency is high

because only the most economic technologies will be built under such a system. In

comparison to the original design, dynamic efficiency in the Swedish system is

improved by the limited support time, because older and market-approved plants will

be phased out of the quota system. If the quota is set high enough, prices will rise

due to scarcity of TGCs and new (i.e. more expensive) RES-E plants will become

profitable so that technical improvements will be triggered.

The stimulation effect depends on the quota level and the resulting market price of

the certificates which improves the economic situation of RES-E producers by

granting them an extra income. But just in this point, it seems as if the Swedish

system has had some difficulties at the beginning. During 2003 and 2004, the

Swedish government had limited the penalty fee to SEK 175 and SEK 240

respectively for each TGC to prevent their prices to rise too much. But this indirect

restriction to the TGC price had a negative influence on stimulation because it fixed

the cost for buy-out at a relatively low level. As a result, there has been a surplus in

the number of TGCs from the beginning on which entails relatively low certificate

prices until the surplus is depleted.

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Figure B-3: Number of TGCs issued and cancelled, together with accumulated surplus over the period 2003-2007.

Source: Swedish Energy Agency (2008).

The reduction of the surplus takes place very slowly because of one further speciality

of the Swedish system which is the open-ended validity of the certificates. That

means that the TGCs, once owned by a market participant, can be carried forward.

This specialty has been explained in chapter 3 as banking. Large producers of RES-

E, whose economic survival does not depend on regular extra revenue from the

certificate sales, can bank the TGCs until their price rises again. The surplus in TGCs

has therefore only recently declined while the TGC price has risen, as can be seen in

Figure B-3 and Figure B-4.

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Figure B-4: Average price of spot traded electricity certificates.

Source: Swedish Energy Agency (2008).

Figure B-5, Figure B-6 and Figure B-7 give an impression of the market outcome of

the Swedish quota system and the total net support in terms of the aggregate cost of

the sold TGCs in the last years.

Figure B-5 shows the RES-E production from all plants that participate in the quota

system, the percentage that this electricity makes up of the total certificate liable

electricity production and the quota fulfilment rate.

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Figure B-5: Electricity generation from RES within the Swedish quota system [GWh]

0

2000

4000

6000

8000

10000

12000

14000

2003 2004 2005 2006 2007

elec

tric

ity g

ener

atio

n [G

Wh]

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

total obligation

PV

Peat

Wind

Hydro

Biomass

percentage of quota liableelectricity productionquota fulfilment

Source: EWI based on data from Swedish Energy Agency (2008).

Irrespective of the above mentioned starting difficulties, the increase in RES-E

production from about 5.6 TWh in the year 2003 to more than 13.2 TWh in 2007

corresponds very well to the indicative targets of the Swedish government. Except in

the year 2003 when the fulfilment level was at 77 % (-the underfulfillment being

triggered by the abovementioned buy-out price limitations-), the quota was fulfilled to

a degree of over 99 % in all the following years. Corresponding to this, the blue line

that marks the RES-E share in the total quota liable electricity production almost

matches the quota set by the government.

The total net support of RES-E in the Swedish system is illustrated in Figure B-6.

Considering Figure B-6 together with Figure B-5, it becomes obvious that the yearly

costs of RES-E support in a quota system like the Swedish one depends on the

amount of generated RES-E but also - and most notably - on the certificate price.

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Figure B-6: Total net support of RES-E by energy source in the Swedish quota system [mio. €]

0

50

100

150

200

250

300

2003 2004 2005 2006 2007

tota

l net

sup

port

of R

ES-E

[mio

€]

0

10

20

30

40

50

60

70

80

remuneration [€/M

Wh]

PV

Peat

Wind

Hydro

Biomass

overall remuneration[€/MWh]

electricity price [€/MWh]

certificate price [€/MWh]

Source: EWI based on data from Swedish Energy Agency (2008).

The good performance of the technology-neutral Swedish system in terms of static

efficiency is illustrated in Figure B-7 which shows the contribution to the total RES-E

production of each energy source and the respective share of the total support for

RES-E by energy source.

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Figure B-7: RES-E generation structure and fraction of the total support by energy source in the Swedish quota system

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2003 2004 2005 2006 2007

elec

tric

ity g

ener

atio

n [%

] of

RES

-Ean

d pe

rcen

tage

of t

otal

sup

port

for R

ES-E

PVPeatWindHydroBiomass

Source: EWI based on data from Swedish Energy Agency (2008). As every produced electricity unit (MWh) receives the same overall remuneration, the

relation is exactly the same. Consequently the most economic technologies that are

eligible (in this case biomass fuelled power plants) are expanded first, while more

expensive technologies like photovoltaics have only imperceptibly entered the market

until now.63

63 The Swedish government has a clear interest in limited costs for the electricity consumers caused by the promotion system. Therefore, as already mentioned above, the Swedish system only provides support for recently built RES-E power plants. Out of these, biomass is the most economic one. The total RES-E production in Sweden evidently has a much higher level due to production from large scale hydro power plants, which is not supported by the quota system.

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B.3 Case Study Germany Germany is a typical example for Feed In Tariff Systems (FIT), because it combines

almost every conceivable peculiarity that these remuneration systems can have. As

for Europe moreover, it was the first FIT system to be implemented (1991).

The first promotion of RES-E has been made in 1991 with the adoption of the Energy

Feed-In Law (Stromeinspeisungsgesetz)64, which introduced the compulsory

purchase of RES-E. A fixed price regime was also established, although the prices

were still defined as a fraction of the average proceeds out of the sale of electricity to

the customers by the electricity suppliers.

In 2000, the Renewable Energy Law (Gesetz für den Vorrang Erneuerbarer Energien

- EEG)65 was enacted, integrating geothermal energy into the promotion scheme and

concentrating the support on rather small utilities in order to preserve the character of

a start-up funding.

At August 1st 2004, the first amendment to the Renewable Energy Law came into

force.66 The main modifications were made in the range of remuneration levels, and

the legal position of operators has been improved.

The latest amendment to the Renewable Energy Law67 took effect in 2009.

The Renewable Energy Law regulates the remunerations to be paid to the operators

of every eligible RES-E installation subject to the respective technology and the date

of commissioning. In the German case, the transmission system operators (TSOs)

are obliged to refund the RES-E operators. Very important in this context is the

obligation on the part of the TSO to buy the electricity at any time, which means that

there is no incentive for the RES-E generator to produce demand-oriented. The only

exception of the obligation to buy is in cases of emergency, i.e. if the absorption of

RES-E would cause a grid overload – only then, the system operator is allowed to

deny grid access and RES-E producers are obligated to reduce or shut down their

production.68

64 StromEinspG (1990). 65 EEG (2000). 66 EEG (2004). 67 EEG (2008). 68 For a detailed description see EEG (2008), §§ 8-12.

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In the following, the different features of the German FIT regulation will be discussed.

The German FIT regulation includes a yearly degression of the initial tariffs

depending on the employed technology. The degression rates range from 0% (hydro

smaller than 5MW) and 1% (biomass, hydro larger than 5MW, geothermal energy,

onshore wind) up to 10% (solar energy). These distinctions are to reflect the unequal

opportunities of cost reductions across the different technologies and therefore to

prevent too challenging tariff cut-downs in the case of already mature technologies

on the one hand and, on the other hand, to avoid too lax requirements in the case of

technologies offering a great cost reduction potential. In other words, the tariff

degression is designed to implement dynamic efficiency into the FIT system.

In the case of solar energy, there are some particular regulations concerning the

degression rates: Firstly, they differ depending on plant size and type of solar

electricity generation. Secondly, the degression rates are contingent upon the

development of the installed capacity during the preceding year. A target corridor for

the yearly expansion of capacity is scheduled in the Renewable Energy Law,

requiring a spread between 1000 MW and 1500 MW capacity expansion in the year

2009 (1100-1700MW in 2010; 1200-1900MW in 2011) for the validity of the

abovementioned degression rates. If the yearly extension is inferior (superior), the

degression rates of the tariffs decrease (increase) in order to make it more probable

that the target corridor is met in the following year.

Concerning the calculation of the individual plants´ remunerations, the German FIT

regulation also includes very detailed arrangements. The payments to installations

generating electricity by means of hydro power, biomass, geothermal energy or solar

energy (only if installed on a building) are calculated as a function of their effective

electricity generation, i.e. the nominal capacity of the respective power plant is

irrelevant for the applicable tariff. As an outcome of the calculations, the operators of

the respective power stations receive the higher tariffs (in €ct/kWh), the lower their

power output is. This provides for an adjusted promotion of the different plant sizes

and therefore allows also small installations to operate profitable, i.e. with more or

less the same return on investment as large installations.

Another instrument to make the remuneration depend on the effective capacity is

applied in the case of onshore wind energy which receives 9.2 €ct/kWh for at least

five years and thereafter only 5.02 €ct/kWh: The worse the location of a wind turbine,

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the longer the high remuneration is paid to the operator. For the site assessment, the

output of a respective turbine at a reference location is calculated and compared to

the effective electricity output of the specific wind turbine in question. If the electricity

generation is higher than 150% of the reference output, 9.2 €ct/kWh are paid only

during the first five years, whereas a wind turbine with an electricity output inferior to

82.5% receives 9.2 €ct/kWh for twenty years. Graduations between these two poles

can be calculated applying linear interpolation. In terms of a theoretical assessment

of this regulation detail, the result depends on the aspired installed capacity:

Supposing that the inferior locations´ exploitation is necessary to meet a certain

target of installed wind turbine capacity and that the legislator is well informed about

the electricity generation costs, the legislator reduces the costs for the consumers of

electricity in comparison to a uniform tariff for wind turbines by reducing the total

subsidies and consequently also the distribution effect. However, this may not be

confounded with a higher static efficiency compared to a uniform tariff. It solely

reduces the producer surplus and thereby the total remuneration volume.

A further interesting item can be found in the field of offshore wind turbines. There, a

similar distinction in the runtime as in the case of onshore wind turbines is made: The

basic remuneration period during which a tariff amounting to 15 €ct/kWh is paid lasts

twelve years. Afterwards, the tariff drops to 3.5 €ct/kWh for the remaining eight years.

But if an offshore turbine is erected at least 12 sea miles off the coast and in a water

depth of at least 20 meters, this duration elongates by 0.5 months for every sea mile

additional to 12 and by 1.7 months for every meter water depth additional to 20.

This regulation is actually very similar to the technology premium which is paid on top

of the feed-in tariff in order to foster the use of particularly progressive technology

components, especially in the field of electricity generation from biomass. Both intend

to promote the development of the respective technologies by allowing for additional

payments if a certain technology is applied. Viewed in this light, the technology

premium as well as the adjusted term of high remunerations represents a further

technology specification.

The performance of the German FIT system in terms of RES-E stimulation can be

seen in Figure B-8. From 2000 to 2008 RES-E increased from roughly 40 TWh to

more than 100 TWh. These figures also include RES-E generated by power plants

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which are not supported by the FIT system, namely large-scale hydro power plants

and a part of the biomass plants. The FIT supported RES-E increased from

approximately 12 TWh in 2000 to 71 TWh in 2008. Figure B-8 further shows the

increase of the RES-E share of gross electricity consumption from 6.3% in 2000 to

15.1% in 2008. As far as the RES-E generation mix is concerned, wind and biomass

contributed most to the rising RES-E share.

Figure B-8: Development of RES-E generation in Germany

Source: EWI based on data from BMU (2007), BMU (2009) and BDEW (2000-2008).

When comparing the RES-E generation mix to the technology mix in the support cost

figures in Figure B-9, one has to keep in mind the schemes´ intentions. The

technology specification directly clarifies that pure static efficiency is not the primary

goal of the arrangement. Having in mind that certain technologies receive a by far

higher remuneration than others and are therefore obviously intended to be

expanded, the remuneration structure has to differ from the generation structure. In

other words, if (the relatively expensive) photovoltaics-generated electricity accounts

for 1% of the total generation of RES-E, this does not mean that it receives only 1%

of the remuneration volume, but rather a much higher fraction. In a technology

neutral scheme, there would be hardly a difference between the generation share

and the remuneration share (See case study Sweden).

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Figure B-9: Development of total RES-E net support in Germany

Source: EWI based on data from BMU (2007), BMU (2009) and BDEW (2000-2008).

Figure B-9 also shows the average support per kWh of RES-E which increased from

8.5 cent in 2000 to 12.253 cent in 2008, despite the degression of the tariffs. This

increase reflects the growing share of expensive technologies, especially

photovoltaics power.

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B.4 Case Study Spain

The Spanish RES-E promotion system is often cited because it is one of the few

countries that have implemented the premium system for the promotion of RES-E. In

fact, Spain uses a combination of a FIT and a premium system. Each producer of

RES-E can choose between a fixed tariff and a premium which is paid on top of the

market price for electricity. The level of the remuneration differs depending on the

technology and on the capacity of the facility. The decision between the two

remuneration systems is taken for one year and afterwards the producer can decide

again if he stays in the one system or switches to the other. In the so called market

option, under which a premium is paid, producers of RES-E receive a statutorily

regulated premium for each unit (kWh) of electricity produced.

The premium is paid in order to reduce the uncertainty of the profitability of a RES-E

project. As in Spain the support of RES-E technologies began quite early with the

Law for Energy Conservation (Ley 82/80 de Conservación de la Energía) in 1980, the

current legislation is the result of a series of changes in legislative measures and

financial support of RES-E production. 69

The basis of the current system has been implemented in 1997 with the Electric

Power Act (Ley 54/97 del Sector Eléctrico), which also formed a major step in the

liberalisation of the electricity sector in Spain.70 The law makes a differentiation

between electricity production under the “ordinary system” i.e. on the spot market

and the “special system” (régimen especial) for electricity production out of the

following primary energy sources: non-consumable and non-hydro energy sources

(solar, wind, geothermal, etc.) and biomass or other biofuels if the installed capacity

of the facility does not exceed 50 MW. Producers which fall under the “special

system” get a purchase guarantee for their electricity and a premium which is paid on

top of the market price. The indicative target for the percentage of RES-E in the

Spanish electricity mix was set by the government in the “Plan for the Promotion of

69 Feed in Cooperation (2007). 70 Free access to the electricity generation is granted and the remuneration is being realised through a competitively organised whole sale market.

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Renewable Energies” (PFER in its Spanish acronym). This target was taken into

account when fixing the level of the premium.

Since 1998 (“Royal Decree” RD 2818/1998) producers have the right to feed in the

total amount of produced electricity into the grid and a formula for the (technology

specific) final price has been established.71 Additionally it has been decided to adjust

the premium every four years.

In 2004 the framework for the “special system” was modified in order to make it more

stable and predictable for RES-E producers (RD 4367/2004). According to the new

regulation the producer has the choice between selling his electricity to the distributor

at a regulated tariff or to sell it on the open market and then receive the negotiated

price plus an incentive. The intention of the new framework was to grant the

producers of the “special system” an adequate payment for their investments,

irrespective of whether they choose the FIT or the premium. One of the positive

effects of this system is that it encourages market participation through the market

option and thus prepares producers of RES-E for competitive market participation

better than a simple fixed tariff. Both, fixed tariffs and premiums were calculated by a

formula that was linked indirectly to the annual average electricity market price.

Despite these modifications and the resulting stable conditions, the expansion of the

RES-E production in Spain stayed far behind the targets of the PFER. Less than 30%

of the target was reached until 2005, mainly due to an unexpectedly high growth in

electricity consumption. As a consequence, a new “Plan for Renewable Energies” for

the period from 2005-2010 (PER para el período 2005-2010) was formulated with a

new target of 12.1% of the primary energy consumption in Spain in 2010. Also higher

premiums for solar power plants and biomass power plants as well as for biomass

cofiring were introduced in 2005 (Ley 24/2005). In addition to the lag in RES-E

expansion, consumer costs had risen and windfall profits were realized under the

market option which then was chosen by more than 72% of all the RES-E producers

until July 2006. The reason for this was the indirect linkage of the tariffs and

71 The formular is the following: P= Pm + Pr ± RE, with P= Payment of the kWh, Pm= Market price, PR= premium, RE= a supplement for reactive energy.

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premiums to the market price for electricity which had risen considerably. Therefore,

in 2006 (RD 7/2006) the linkage of the FITs and the premiums was abolished.72

In 2007 a new law (RD 661/2007) was introduced which replaced the RD 436/2004.

The major modification concerning the payment system was the introduction of cap

and floor prices for the overall remuneration level. In this way the flexibility of the

system is reduced by setting a corridor for the sum of the electricity price and the

premium. Figure B-10 shows the correlation between the development of the

remuneration level and the premium level in order to maintain a constant range of the

overall remuneration.

Figure B-10: Development of remuneration level and premium level in Spain

Source: Feed in Cooperation (2007).

The overall remuneration within the market option is calculated in the following way:

1) The minimum level of the overall remuneration is paid as long as the sum of the

electricity market price and the reference premium is less than the minimum level.

This means that the real premium is calculated as the difference between the market

price and the minimum level and that it is higher than the reference premium. As the

market price rises, the real premium declines until the sum of the market price and

72 CNE (2007).

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the reference level reaches the minimum remuneration. Meanwhile the overall

remuneration level is constant.

2) The reference premium is paid on top of the market price if the sum of the

electricity market price and the reference premium ranges between the minimum and

the maximum limit. Thus, the overall remuneration level increases, whereas the real

premium is constant.

3) If the sum of the electricity market price and the reference premium passes the

upper limit the overall remuneration level corresponds to the cap until electricity

market price exceeds the cap price. The real premium that is paid to the producer is

the difference between the cap and the electricity price. The overall remuneration

remains constant and the real premium declines as the electricity price rises.

4) If the market electricity price exceeds the cap, no premium is paid and the overall

remuneration is equal to the electricity market price.73

In so doing, the upper and lower limit for the premiums bring the market option closer

to a FIT system, as they guarantee a minimum overall price to each RES-E producer

but also reduce windfall profits through the upper limit.

The Spanish system also includes a technology specific support, as well in the

regulated tariff option as in the market option. The intention is to have better control

over the stimulation of the different technologies. Therefore the PER for the period

2005-2010 also includes specific targets for each technology. Tariffs and premiums

are defined in a way in which the government hopes to meet these targets as

effectively as possible.

Table B-2 gives a detailed overview of the remunerations for the different RES-E

technologies. It is striking that photovoltaics can only receive a regulated tariff but not

a premium. In addition to that the remuneration level is very high. The specific

support level for this technology was set in order to foster its expansion, after it had

lagged behind the PER targets at the beginning of the century. And it seems to have

been quite effective in the sense of stimulation. Thus, the current system in Spain is

73 Feed in Cooperation (2007).

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still based on the Royal Decree RD 661/2007 but it has been modified in 2008

concerning the regulation for photovoltaics.74

Because of the phasing out of the old FIT and risen costs, due to an extremely high

expansion of the installed photovoltaics capacity, the new decree brings up further

restrictions for the remuneration of electricity produced from photovoltaics (the target

of the PER for the Period 2005-2010 was almost reached by middle of 2007, and in

May 2008 the total installation of photovoltaics in Spain reached 1000 MW). Some

important points of the changes that have been made are:75

A new distinction between the different photovoltaics technologies has been

introduced. It differs now between roof- and building projects with a rated power of up

to 20 kW and those above that level on the one hand, and on the other hand other

projects (mainly free range plants) are treated as another category.

A new register has been created, in which fully developed projects can be inscribed

and receive a FIT in advance, i.e. before their realisation (the so-called “Register on

the in-advance-allocation of the compensation”, Registro de Preasignación de

Retribución – RPR). From September 2008 onwards, only those new installed

projects that are in this register can receive the regulated tariff. But there are limits for

the inscription to the RPR. The upper limit for 2009 has been set at 133 MW of free

range plants and 267 MW of roof- and building-plants. Above the limit an exceptional

amount of 100 MW for free-range plants in 2009 and another 60 MW in 2010 can be

inscribed.76

The introductory tariff for 2009 is reduced to 34 Cents/kWh for small roof- and

building-plants up to 20 kW, to 31 Cents/kWh for those bigger than 20 kW and to 32

Cents/kWh for free-range plants up to 10 MW.

The case study of Spain shows how the premium system can be elaborated. The

uncertainty for an investor is a little higher than in a pure FIT system. But the

example also shows that the stimulation effect of the system is mainly dependent on

the level of the remuneration. The approximation to the FIT system and the cuts in

the system flexibility that have been made were only implemented after the

74 RD 1578/2008 (2008). 75 DIKEOS Abogados (2008). 76 In 2009 additionally an annual 500 MW cap for CSP was introduced.

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expansion of some RES-E technologies had exceeded the set targets and after

measures to ensure the accuracy in achieving the target had become necessary. The

history of constant adaptations shows that the premium system as well as the FIT

system needs adjustments from time to time to assure the achievement of the set

targets. Figure B-11 shows that the production of RES-E underlied considerable

fluctuations according to the production level of hydro energy, but it also becomes

obvious that the adjustments of the regulatory framework had a strong influence on

the electricity production of the different technologies. The share of wind energy for

example is constantly rising since the “special system” was introduced and also the

increases in tariffs for biomass and solar energy had some visible effect on the

produced electricity. The share of electricity production from biomass has significantly

risen, and the extreme jump of the PV production 2007 also becomes visible (in

terms that the amount becomes visible in relation to the RES-E production from other

sources).

Figure B-11: Electricity generation from RES and share of gross electricity consumption in Spain

0

10000

20000

30000

40000

50000

60000

70000

2000 2001 2002 2003 2004 2005 2006 2007

elec

tric

ity g

ener

atio

n [G

Wh]

0%

5%

10%

15%

20%CSP

PV

Municipal solid waste

Biogas

Biomass

Wind

Hydro <= 10MW

Hydro >10MW

percentage of grosselectricity consumption

Source: EWI based on data from IDAE (2006) and Eurostat (2009).

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Table B-2: Tariffs and premiums in the Spanish RES-E promotion system [as modified in RD 661/2007]

Source: Feed in Cooperation (2007).

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C. Model Description of DIME (Dispatch and Investment Model for Electricity Markets in Europe)

C.1 Basic properties DIME was developed to combine the advantages of earlier simulation tools of the

Institute of Energy Economics, namely GEMS (German Electricity Market Simulation)

and CEEM (Cogeneration in European Electricity Markets). At the same time,

regional coverage was extended. DIME was designed especially for long term

simulations.

DIME is formulated as a linear optimization model for the European electricity

generation market. It is applied to simulate dispatch as well as investment decisions

regarding the supply side of the electricity sector. The objective function minimizes

total discounted costs based on the assumption of a competitive generation market.

In DIME, all EU27 Memberstates, as well as Switzerland and Norway are

represented and modelled in 29 regions.

DIME uses a technology based bottom-up approach. It provides for 11 technologies

for electricity generation comprising fossil, nuclear, hydro storage, and pumped

storage plants. Technologies are further distinguished into representative vintage

classes. Each class comprises all installations of the same technology being built

during a certain period in the past. There are additional classes for future

investments. This allows for attributing classes with different properties such as

electric efficiency according to the age of the average installation within each class.

The vintage structure in each region requires the model to commission new

installations. Existing installations can be retired for economical reasons before their

technical life time expires.

Simulations can be conducted for representative periods up to the years 2030 using

steps of five years. Valid periods are 2008, 2010, 2015, 2020, 2025, and 2030. For

each period retirement and commissioning of installations by technology and region

is calculated. Within each period generation has to meet demand for electricity while

accounting for physical exchange with neighbouring regions. Load structures are

defined for four seasons, with each season having three representative days

(working day, Saturday, Sunday). Each day can be subdivided into up to 24 hours.

Thus, a period can at most consist of 288 typical load levels. At each time electricity

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load must be met by adequate generation at home or abroad. Transfer capacities

limit physical electricity exchange.

C.2 Structure of the model Figure C-1 illustrates the basic structure of DIME and depicts its main inputs and

outputs.

Figure C-1: Input-output structure of DIME

Demand

Existing transmission capacities

Transmission loss

Fuel prices

Existing generating capacities

DIME

Linear optimization problemfor competitive markets

Annual generation structure

Physical exchange

Technical properties of technologies

Commissioning and retirement of capacities by

technology

Residual demand

Political restrictions

Economical properties of technologies

Total demand

Supply

Exogenous generation

Installed capacities

Plant dispatch by load level

Marginal generation costs

Fixed and variable generation costs

Fuel consumption

Carbon emissions

Input Output

Supply side input is based on detailed databases containing information on installed

capacities in the different model regions and information on technical and economical

parameters. Demand side input data comprises residual load structures and annual

demand. Further, assumptions on future values for all factors are made. Political

restrictions such as the use of nuclear power and objectives on climate protection are

defined.

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For each forecast period up to 2030 output is produced on retirement and

commissioning of installations by technology, fuel use, carbon emissions, and costs

related to production. For each load level within every forecast period output is

produced on plant dispatch by technology, use of storage plants, marginal costs for

electricity generation, electricity exchange. Weighted marginal costs for electricity

generation can be used as price indicator in competitive markets.

The next two sections provide additional information on input and output data.

C.2.1 Input data C.2.1.1 Supply side data

DIME accounts for round about 75 % of existing net generating capacity of the

regions under consideration. Table C-1 summarizes technologies incorporated in

DIME and those treated exogenously.

Table C-1: Technologies treated endogenously and exogenously

Technologies incorporated in DIME Technologies treated exogenously - Nuclear power stations - Run-of-river - Lignite power stations - Other renewable energies - Hard coal power stations - Waste - Oil power stations - Large-scale CHP technologies - Gas-fired combined-cycle power stations (except for Germany) (CCGT) - Small-scale CHP technologies - Open cycle gas turbines (OCGT) - Pumped-storage power stations - Hydro storage power stations - Backstop flexibility technology - Large-scale CHP technologies in

Germany

Information on installed capacity is obtained from EWI’s power plant database. Net

capacity for each installation is assigned to several vintage classes per technology.

Thus, age specific properties such as efficiency are accounted. Existing installations

will be decommissioned when their technical life time expires. Also, a certain date for

retirement can be set. Furthermore, installations will be decommissioned if their

production costs exceed sales revenues. Investment costs of existing installations do

not influence the decision as these are considered to be sunk costs.

Figure C-2 shows, which regions are considered in DIME. Blue regions are explicitly

modelled, green ones are satellite regions with electricity exchange only.

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Figure C-2: Representation of European countries in DIME

Table C-2 summarizes economical and technical properties being assigned to each

technology.

Model region: EU27++

Non-model region

Satellite region

Satellite region

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Table C-2: Properties of technologies

Cost components Technical properties - Investment cost - Installed capacity - Depreciation time - Availability - Real interest rate - Net efficiency - Fixed operating cost - Minimum load condition - Fuel cost - Rate of cooling down during idle time - Other variable cost - Start-up time - Start-up cost - Average seasonal availability - Opportunity cost for carbon emissions - Technical life time - Maximum capacity of hydro reservoirs - Natural inflow into hydro reservoirs

Investment costs are being annualized according to predefined depreciation time and

interest rate. Fixed operating costs comprise costs for maintenance and personnel.

Fixed costs are considered on an annual basis. They do not depend on actual

production decisions. On the other hand, fuel costs, start-up costs, other variable

costs, and opportunity costs for carbon emissions are related to production decisions.

Fuel prices and electric efficiencies influence fuel costs. Start-up costs depend on

several factors, namely specific costs for additional attrition from cold start and the

duration of cold start. A cooling function links start-up costs for cold start and actual

duration of standing idle.

In addition, lignite power stations are bound to local deposits. The operation of

nuclear power stations is subject to political restrictions. These can be country

specific limitations, phase-out plans or a complete ban.

DIME provides for two types of hydro stations: hydro storage and pumped-storage.

Hydro storage plants can store natural inflow to their reservoirs subject to initial

reservoir level and maximum reservoir size. Natural inflow depends on the season

and region. The duration of a storage cycle can span up to one year. In contrast to

that, cycle duration for pumped-storage plants is limited to one week.

Decommissioning of hydro stations is not allowed, due to their long life time and

favourable retrofitting measures.

C.2.1.2 Demand side data The general approach to derive demand inputs comprises two steps. First, total

annual demand and its structure are defined. Second, the model’s residual demand

is calculated from annual demand and electricity generation of technologies not being

considered in the model.

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Total demand

Annual electricity demand is specified for each region and future period. It consists of

final electricity consumption and transmission losses. In contrast, consumption for

storage operation is treated endogenously. As already mentioned a period’s time

resolution comprises four seasons having three representative days with up to 24

hours per day. In several steps annual demand is therefore broken down to hourly

load structures. This calculation is based on historical data published by UCTE and

national sources. The seasons are defined as follows:

Winter consisting of November, December, January, and February,

Spring consisting of March and April,

Summer consisting of May, June, July, and August,

Autumn consisting of September and October.

Every season is represented by a typical week which repeats several times

depending on a seasons duration. Each week consists of one Saturday, 1.2 Sundays

and holidays, and 4.8 working days. Table C-3 illustrates the total occurrence for

each day type and season. Figure C-3shows an example for a load structure in the

model.

Table C-3: Total occurrence of day types per season

Day type Spring Summer Autumn Winter Working days 41.8 84.3 41.8 82.3 Saturdays 8.7 17.6 8.7 17.1 Sundays 10.5 21.1 10.5 20.6 Total days 61 123 61 120

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Figure C-3: Example of hourly, daily, and seasonal load fluctuations

0

20

40

60

80

100

1 4 7 10 13 16 19 22 1 4 7 10 13 16 19 22 1 4 7 10 13 16 19 22

Time of day

GW

Autumn Spring Summer Winter

Saturday Sunday Working day

Each year starts with a spring season and ends with a winter season. Each week

starts at Saturday followed by Sunday and then working days. Load sequencing is of

utmost importance especially for start-up decisions and the operation of storage

plants.

Residual demand

In order to derive residual demand, first of all the RES-E generation computed in

LORELEI is deducted from total demand. In addition, assumptions on generation

from other exogenously treated technologies are made (right-hand side of Table

C-2). Again, for each technology annual values are combined with an hourly

generation structure. For wind energy a more detailed approach is chosen to reflect

its intermittent character. Generation is processed from typical historic feed-in

structure and a random component, causing deviations from expected values. This

allows feed-in to randomly fluctuate throughout the year.

Finally, generation of all exogenous generation is deducted from total demand. The

result is the model’s residual demand as depicted in Figure C-4.

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Figure C-4: Example of deriving residual demand

0

10

20

30

40

50

60

70

80

90

100

1 4 7 10 13 16 19 22 1 4 7 10 13 16 19 22 1 4 7 10 13 16 19 22

Time of day

GW

Residual demand Run-off-river Small-scale chp Wind Others

Saturday Sunday Working day

C.2.1.3 Restrictions on electricity exchange Transmission capacities between the regions limit physical exchange. By default net

transfer capacities provided by ETSO are specified. Future grid extensions are also

provided for. Within a region there are no bottlenecks assumed. Electricity exchange

between regions is subject to a transmission loss of 10 % per 1000 kilometres.

Average distances between the regions main production and consumption points are

defined.

C.2.2 Output Results are obtained regarding capacities, generation, physical exchange, costs, fuel

consumption and carbon emissions.

For each forecast period installed capacity by region and technology is determined

from installed capacity in the preceding period as well as from retirement and

commissioning in the current period. A minor part of installed capacity is seasonally

not available due to planned and unplanned outages.

At no time production may exceed available capacity. In addition, thermal power

stations must be started up in order to become ready-to-operate. Figure C-5 contains

plants dispatch for a working day in autumn. In the example time resolution was set

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to eight intervals per day each lasting for three hours. Import and export values have

been aggregated for all transmissions lines to neighbouring countries. A region as a

whole may import and export at the same time, albeit between two regions electricity

can only flow into one direction.

Figure C-5: Sample of hourly dispatch in Germany for a working day in autumn

-20

-10

0

10

20

30

40

50

60

70

80

90

1-3 4-6 7-9 10-12 13-15 16-18 19-21 22-24

Time of day

GW

Pumping

Export

Import

Hydro power

Fuel oil

Natural gas

Hardcoal

Lignite

Nuclear

Also annual production and electricity exchange can be obtained for each region.

Marginal cost of electricity production can be used as indicator for regional base load

prices. They reflect sustainable-industry prices, accounting for short-run and long-run

costs. However, in a situation of excess supply they will approach short-run marginal

costs.

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Literature

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BERR - Department for Business Enterprise & Regulatory Reform (2008): Atlas of UK Marine Renewable Energy Resources: Atlas Pages - A Strategic Environmental Assessment Report, March 2008. BDEW (2000-2008): EEG-Jahresabrechnungen 2000-2008, Bundesverband der Energie und Wasserwirtschaft [URL: http://www.bdew.de/bdew.nsf/id/DE_EEG-Jahresabrechnungen].

BMU (2007): EEG-Erfahrungsbericht 2007, Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit, November 2007.

BMU (2009): Erneuerbare Energie in Zahlen – Nationale und Internationale Entwicklung, Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit, Juni 2009.

California Energy Commission (2008): Summary of PIER-Funded Wave Energy Research, March 2008. Carbon Trust (2006): Future Marine Energy, Results of the Marine Energy Challenge: Cost competitiveness and growth of wave and tidal stream energy, January 2006. CIA (2007): The World Factbook, [URL: https://www.cia.gov/library/publications/the-world-factbook/]. CNE (2007): RÉGIMEN ESPECIAL DE PRODUCCIÓN DE ENERGÍA ELÉCTRICA EN ESPAÑA, Informe mensual de ventas de energía del régimen especial, 31st July 2007., [URL: www.cne.es/cne/doc/publicaciones/IAP_ventas_RE_julio07.pdf] retrieved at 25/02/2009. Commission of the European Communities (2001): COM(2001) 2001/77/EC, Directive on Electricity Production from Renewable Energy Sources, July 2001. Commission of the European Communities (2008): COM(2008) 19 final, Proposal for a Directive of the European Parliament and of the Council on the Promotion of the Use of Energy from Renewable Sources, Article 4, January 2008.

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